Regulation

Interactive Brokers hit with $38m penalty amid regulatory clampdown

The Securities and Exchanges Commission (SEC) has slapped Interactive Brokers with a staggering  penalty after the brokerage firm failed to report Suspicious Activity Reports (SARs) for microcap securities trades.

The SEC penalty stands at $11.5 million while parallel actions from FINRA and the CFTC draw up a total bill of $38 million following a series of “anti-money laundering failures”.

According to a press release published by the SEC, over a one-year period: “Interactive Brokers failed to file more than 150 SARs to flag potential manipulation of microcap securities in its customers’ account.”

The order finds that “Interactive Brokers failed to recognise red flags concerning these transactions”, while also failing to investigate suspicious activity and file SARs in a timely fashion.

Interactive Brokers agreed to settle the case by paying the $38 million penalty, which arguably pales in significance compared to its $1.2 billion in profit in the previous fiscal year.

Although the firm mainly offers its clients exposure to traditional markets, it has been allowing customers to opt for more speculative investments like Bitcoin, all of which is traded on the CME’s Bitcoin futures contract as stated on its website.

For more news, guides and cryptocurrency analysis, click here.

Oliver Knight

Londoner ‘Ollie’ graduated from Birmingham City University with a journalism degree in 2016. He combines his writing with his love of crypto and blockchain here at Coin Rivet, saying “It disrupts well-established institutions (banks) while giving an avenue to the less fortunate to achieve financial freedom.” Like all true Londoners, his pet hate is… “People standing on the left-hand side of the escalators on the Tube!”.

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