Interactive Brokers paid $55m over off-channel messages in September 2023

What happened

On 29 September 2023, US regulators announced settled recordkeeping actions involving Interactive Brokers. The SEC imposed a $35 million penalty and the Commodity Futures Trading Commission imposed a $20 million penalty, bringing the combined total to $55 million.

What regulators found

The SEC and CFTC said employees used personal text messages, WhatsApp and other unapproved channels for business communications that the firms were required to preserve. The SEC order said the failures occurred from at least January 2019, while the CFTC described widespread use of unapproved methods and associated supervisory failures.

The recordkeeping rules are intended to preserve business communications for regulatory oversight and investigations. The orders focused on books-and-records and supervision obligations, not a finding that client funds were missing.

Settlement and status

Interactive Brokers admitted the facts set out in the regulators' orders, agreed to cease-and-desist provisions, and accepted remedial undertakings that included independent compliance consultants. TraderJury records the enforcement actions as resolved settlements.

Scope

This case concerns the Interactive Brokers entities and communications practices specified in the SEC and CFTC orders. It should not be interpreted as a general verdict on the broker's trading platform, pricing or current compliance controls.