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ARTICLE · 21 AUGUST 2020

Interactive Brokers LLC Submits To SEC, FINRA, And CFTC Penalties Totalling $38 Over Widespread AML Failures

Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
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Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

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Interactive Brokers LLC ("Interactive Brokers") recently settled with three separate regulatory entities for a total of $38 million,

United StatesFinance and Banking
Pete S. Michaels
Pete S. Michaels
Michael E. Pastore
Michael E. Pastore
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Interactive Brokers LLC ("Interactive Brokers") recently settled with three separate regulatory entities for a total of $38 million, without admitting or denying the findings.  According to the SEC, Interactive Brokers failed to file at least 150 Suspicious Activity Reports (SARs) in connection with the potential manipulation of microcap securities in its customers' accounts, leading to the payment of $11.5 million in fines.  The same alleged activity constituted violations of anti-money laundering (AML) rules resulting in $15 million in fines payable to FINRA and $12 million to the CFTC. 

Some of the activity cited by the SEC that should have resulted in SARs filings included:

  • Interactive Brokers' customers deposited large blocks of microcap securities followed by sales of those securities and the rapid withdrawals of the proceeds from the customers' accounts.

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