Interactive Brokers cooperates with DOJ inquiry concerning AML matters
Electronic trading major Interactive Brokers Group, Inc. (NASDAQ:IBKR) has just posted its latest 10-Q filing with the Securities and Exchange Commission (SEC). The document offers details on the broker’s performance in the third quarter of 2020 and provides an update on some regulatory matters.
As one might expect, the document mentions the $38 million fine imposed on Interactive Brokers in August 2020 for ““widespread failures” in the firm’s anti-money laundering (AML) program.
As announced on August 10, 2020, Interactive Brokers agreed to settle certain matters related to its historical anti-money laundering and Bank Secrecy Act practices and procedures with FINRA, the SEC and the CFTC. As part of the settlements, Interactive Brokers agreed to pay penalties of $15 million to FINRA, $11.5 million to the SEC and $11.5 million to the CFTC, plus approximately $700,000 in disgorgement.
In addition, the broker agreed to continue the retention of an independent consultant to review the implementation of its enhanced compliance practices and procedures.
In the 10-Q filing, Interactive Brokers confirms that it is cooperating with the Department of Justice on an inquiry related to these matters. The impact on Interactive Brokers’ financial results is not expected to be material.
The company says:
“We are also cooperating with a United States Department of Justice inquiry concerning these matters, and while its outcome cannot be predicted, we do not believe that the resolution of this inquiry is likely to have a materially adverse effect on our financial results”.
In its 2020 Risk Monitoring and Examination Priorities Letter, FINRA highlighted AML as an area of concern and noted it will assess firms’ compliance with FINRA’s AML rules.
In determining the appropriate sanction, FINRA said that it considered the meaningful steps that Interactive Brokers took after the commencement of FINRA’s investigation to remediate its AML program.