Interactive Brokers LLC has agreed to pay a fine of $475,000 as a part of a settlement with the Financial Industry Regulatory Authority (FINRA).

Between June and December 2021, Interactive Brokers incorrectly calculated the number of excess shares of stocks listed on European exchanges it had available to return to customers from whom it had borrowed them as part of the firm’s fully paid securities lending program.

As a result, in more than 800 instances the firm returned borrowed shares when it should not have, which caused the firm to create or increase deficits for the relevant securities, in violation of Exchange Act§15(c), Exchange Act Rule 15c3- 3(b)(l), and FINRA Rule 2010.

During the same period, in connection with this activity, Interactive Brokers failed to establish, maintain, and enforce a supervisory system, including written supervisory procedures (WSPs), reasonably designed to comply with the firm’s possession and control obligations under Exchange Act §15 and Exchange Act Rule 15c3-3(b)(1 ). The firm therefore violated FINRA Rules 3110 and 2010.

Additionally, between January 2021 and December 2023, Interactive Brokers allowed an unregistered associated person to lead and oversee some software development efforts concerning the firm’s securities finance business, including the firm’s securities lending program.

As securities lending is a covered function, that person was required to have been registered with FINRA as an Operations Professional. By allowing an unregistered person to act in a capacity requiring registration, the firm violated FINRA Rules 1210 and 2010.

On top of the $475,000 fine, Interactive Brokers has agreed to a censure.