Interactive Brokers to Pay $38M in Settlement Over AML Lapses

Publicly traded brokerage firm Interactive Brokers has agreed to pay multi-million dollar penalties to the SEC, Finra and CFTC for failure to flag suspicious transactions and lapses in AML compliance.

By Jaspreet Kalra

Aug 10, 2020 at 6:20 p.m. UTC

Updated Sep 14, 2021 at 9:42 a.m. UTC

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Brokerage firm Interactive Brokers LLC agreed to pay $38 million in penalties to settle charges related to lapses in Anti-Money Laundering (AML) requirements and failure to flag suspicious transactions, according to a recent announcement by the Securities and Exchange Commission (SEC).

The announcement said that over a one-year period Interactive Brokers failed to file about 150 Suspicious Activity Reports to the SEC and also did not properly investigate suspicious activity as required under procedure.

Under terms of the agreement, the brokerage firm will pay the SEC $11.5 million, Finra $15 million and the Commodity Futures Trading Commission $11.5 million.
According to Finra’s separate announcement, between January 2013 and September 2018 Interactive Brokers failed to devote its attention to meeting AML guidelines. The announcement added the firm also did not adequately examine its customers' wire transfers for suspicious activity, including the ones that originated in countries recognized as “high risk” by regulators.
As part of the settlement, the brokerage will be required to make necessary changes suggested by a third-party consultant to remedy the issues and disgorge certain profits in addition to the penalties assessed by those agencies.

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