Interactive Brokers LLC has agreed to pay a fine of $ 125,000 as part of a settlement with the Financial Authority of the Financial Industry (Finra).
Since January 2022 and October 2024, interactive brokers have failed to create and maintain a supervisory system, including written procedures, which are reasonably designed to achieve compliance with the company’s obligation to provide customers of commercial notices and that some commercial notifications or part of the investment investors representing market spreading for market discounts may be taxable as ordinary.
Although the company used a third party supplier to provide time for commercial notifications, the written processes of the business did not clarify how the company would oversee the third party supplier and the company had no procedure to verify that bond purchasers did not receive any bond markets.
During the relative period, interactive brokers failed to disclose the discounts of the non -minimal market in 1,918 transactions for 130 customers, with a total value of about $ 40 million.
The company then provided the required disclosures to influenced business customers, as well as a bid to offset customers for proven adverse tax consequences resulting from delayed revelations.
In October 2024, the company and its third seller implemented an automated notice that requires customers to recognize, at the time of trade, the possible tax consequences of their transaction when buying bonds negotiating at non -minimal market discounts. Customers must recognize the revelation before the transaction is completed.
Failing to determine and maintain a supervisory system, including written procedures, logically designed to achieve compliance with the company’s obligations to disclose trade and failing to disclose some essential discounts on the market, the interactive brokers violated MSRB G-27 rules.
In addition to a fine of $ 125,000, the company agreed to an accusation.