Electronic negotiation The large interactive LLC brokers agreed to pay a fine of $ 650,000 as part of a settlement with the Financial Industry Regulatory Authority (Finra).
Between November 2019 and December 2024, interactive brokers have failed to exercise reasonable due diligence before approved by certain customer accounts that do not manage or consulted by financial advisers or other third parties (self-directed customers) for trading options.
During this time, the intercession used an automated system mainly to approve or reject customers for options. However, the company’s system was not reasonably designed and the company approved some self -employed customers for options transactions despite the red flags that the transactions of options were potentially inappropriate for them.
Thus, the business violated the Finra 3110, 2360 and 2010 rules.
During the same period, interactive brokers failed to maintain the required files that reflect the automated disapproval of interactive brokers for certain self -employed customers for options.
Therefore, the business violated the rules of Finra 2360, 4511 and 2010.
In addition to the fine of $ 650,000, interactive brokers agreed on a accusation.