Nasdaq To Receive $475,000 As Fine from Interactive Brokers

Do you know that Interactive Brokers, a brokerage firm traded on the Nasdaq, has agreed to pay a $475,000 fine to settle charges from the exchange? Well, this is nothing but the simple truth. The charges relate to five different “corporate actions,” including sending orders with incorrect prices.

The Charges 

Between January 2020 and June 2021, Interactive Brokers didn’t handle certain corporate actions properly due to problems with its supervisory systems. This led to the firm sending orders to the market with incorrect prices sometimes. In two cases, the firm’s procedures allowed customers to sell shares they didn’t actually own. According to Nasdaq, after investigating, they found that Interactive Brokers incorrectly processed five corporate actions during that time. This happened due to system and supervisory issues. Nasdaq said this in a statement called an AWC.

Nasdaq also discovered that Interactive Brokers broke its rules about member firms needing to have supervisory systems to ensure they follow the rules. The exchange also said the brokerage’s risk management controls for wrong orders weren’t good enough in some situations, especially for orders involving warrants.

The Fine Settlement

In response to the violations, Nasdaq has punished Interactive Brokers with a censure and a fine of $475,000. The firm is also taking steps to compensate customers who were directly affected by the late processing of corporate actions. Interactive Brokers has accepted the sanctions voluntarily and has given up its procedural rights, including the right to request a formal complaint and a disciplinary hearing.

Moreover, the firm has agreed not to publicly deny the findings of the agreement. However, it’s important to understand that the matter is not resolved until the Nasdaq Enforcement Department and the Nasdaq Review Council review and accept the agreement. If accepted, the agreement will be permanently recorded as part of Interactive Brokers’ disciplinary record. It may also be considered in any future actions taken by Nasdaq or other regulators against the firm. Interactive Brokers has not made any public statements about the fine imposed by Nasdaq.

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