The large institutional brokerage Interactive Brokers LLC, based in the United States has been fined by US regulatory authorities for AML and reporting failures, according to the US Securities and Exchange Commission (SEC) notice, published today.
The SEC reported that “Interactive Brokers LLC will pay an $11.5 million penalty to settle charges it repeatedly failed to file Suspicious Activity Reports (SARs) for U.S. microcap securities trades it executed on behalf of its customers. In parallel actions, the Financial Industry Regulatory Authority (FINRA) and the Commodity Futures Trading Commission (CFTC) today announced settlements with Interactive Brokers related to anti-money laundering failures in which the registered broker-dealer agreed to pay penalties of $15 million and $11.5 million, respectively, for a total of $38 million in penalties paid to the three agencies.”
The SEC’s order finds that Interactive Brokers violated the financial recordkeeping and reporting provisions of the federal securities laws and a related SEC rule. Without admitting or denying the SEC’s findings, Interactive Brokers agreed to be censured, to cease and desist, and to pay an $11.5 million penalty. In its settlements with FINRA and the CFTC, Interactive Brokers agreed to retain an independent compliance consultant and to disgorge certain profits in addition to the penalties assessed by those agencies.
This case highlights how important compliance and reporting standards are in regulated jurisdictions. Oftentimes keeping up with proper filings and procedures is a costly process, but it must ultimately be done in order to avoid such penalties. Our Financial Commission partners are able to help ensure brokers’ satisfy such regulatory requirements – contact us for information.
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