Data Management Error In Stock Lending Program Costs Interactive Brokers $475,000
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Interactive Brokers has been slammed a penalty of $475,000 from the Financial Industry Regulatory Authority (FINRA). The regulator accused the company of making mistakes in its share lending program. The brokerage has already agreed to settle the issue with the regulator.
According to a letter from the Financial Industry Regulatory Authority, Interactive Brokers miscalculated the number of extra shares of stocks it had that were borrowed from customers. This mistake happened with stocks listed on European exchanges. The company returned borrowed shares more than 800 times when it should not have done so. This created problems with the number of securities that the firm managed.
FINRA Accuses Interactive Brokers Of Operating Using A Bad System
The Financial Industry Regulatory Authority pointed out that Interactive Brokers did not have a good system in place to supervise its activities. The company failed to set up proper written procedures to follow the rules about the shares it controlled. This is very important for keeping track of borrowed stocks and ensuring that everything is done correctly.
The report also revealed that Interactive Brokers allowed someone who was not registered to manage some software work for its securities finance business. This person oversaw parts of the securities lending program between January 2021 and December 2023. The Financial Industry Regulatory Authority stated that all individuals in this role must be registered.
Even though Interactive Brokers accepted the penalty, the Financial Industry Regulatory Authority announced that it would not take any future actions against the brokerage for the same issues. This means that the company can move forward without worrying about more penalties for these mistakes.
Last year, Interactive Brokers was criticized by the money regulators in Australia for problems with its stock lending program. In this program, the brokerage lets stock owners lend their stocks to other traders. Those traders can then sell the stocks to try to earn money.
Interactive Brokers Reveals Plan To Buy Saxo Bank
A recent report showed that Interactive Brokers plans to buy Saxo Bank, a major bank in Denmark. However, the company isn’t the only one that wants to gain ownership of Saxo Bank. Other businesses, like Altor Equity Partners and Centerbridge Partners, are also trying to bid for the bank.
Interactive Brokers is one of the top trading platforms in the world. It helps large traders and people who love trading. The company has received awards for being the best broker for experienced traders, trading around the world, and handling risks and money.
With all these changes, Interactive Brokers wants to keep helping its customers. The company plans to boost its systems and follow all the rules. As it moves forward, the bank hopes to keep its good name in the trading world.
