Interactive Brokers Australia announced today (Wednesday) that it had paid the penalty to comply with a breach notice issued by the Australian Securities and Investments Commission (ASIC) Market Discipline Panel (MDP). The panel called the company's behavior "reckless" because it allowed further suspicious transactions even after regulators raised concerns.
The regulator also accused the broker of failing to maintain necessary organizational and technical resources.
Interactive Brokers failed to comply with
This fine was imposed in response to suspicious trading activities by a customer of the brokerage platform. The broker allowed the "experienced trader" to place a number of orders aimed at increasing the closing price of the ASX-listed company's shares.
According to ASIC, Interactive Brokers took too long to close these alerts, the broker did not receive meaningful review instructions on the alerts, and failed to take steps to deal with suspicious transactions. Additionally, Interactive Brokers did not file a suspicious activity report with regulators until November 5, 2021.
ASIC said: "MDP considers that these circumstances indicate that Interactive Brokers did not have enough staff with the necessary skills, knowledge or experience to properly assess these alerts, or that these staff were not adequately supervised to ensure that they carried out their duties."
"The MDP states that analysis of high-risk alerts must begin on the relevant transaction date and that review of all alerts should be completed within two weeks."
Earlier this year, ASIC issued two orders against the Australian subsidiaries of Interactive Brokers, temporarily preventing them from issuing Share Earnings Enhancement Plan (SYEP) derivatives to retail investors. The order was issued after the regulator found flaws in the product's target market determination and the broker's product disclosure statement.
