Interactive Brokers has been fined $400,000 by the Financial Industry Regulatory Authority (FINRA) for longstanding reporting and supervisory failures relating to customer complaints, regulatory disclosures and internal controls.
Interactive Brokers Fined $400k by FINRA
In a letter of acceptance, waiver, and consent published on May 1, FINRA stated that the firm failed to accurately report statistical and summary information regarding written customer complaints from January 2020 through June 2022, in violation of FINRA Rule 4530.
During this period, the regulator said that at least 300 complaints went unreported, including those related to website functionality, customer service, and trading platform issues.
FINRA also reportedly found that Interactive Brokers had an inadequate supervisory system in place, stating the firm’s written procedures and training materials did not provide sufficient guidance for identifying and reporting complaints under the applicable rules.
Between 2011 and 2022, Interactive Brokers is also said to have failed to timely report 91 regulatory actions and civil complaints.
FINRA explained that in 12 cases, the firm did not update its Form BD to disclose actions taken by foreign financial regulators against its affiliates.
The broker self-reported the issues to FINRA in early 2022 and has since amended its filings. In addition to the fine and a formal censure, the firm must now certify within 180 days that it has implemented a supervisory system capable of achieving compliance.
Interactive Brokers accepted the findings without admitting or denying them.
