CFTC Slams $1 Million Fine on Interactive Brokers for Supervision Failures

The Commodity Futures Trading Commission (CFTC) on Thursday disclosed that it has ordered Interactive Brokers LLC, a registered futures commission merchant, to pay over $1 million for failing to diligently supervise its employees' handling of exchange fees charged to customers.

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According to the order, from approximately January 2015 to December 2021, Interactive Brokers failed to ensure that its employees accurately assessed exchange fees for customer trades.

Specifically, Interactive Brokers failed to implement necessary changes to exchange fee schedules, and thus charged customers executing certain spread trades the non-member exchange fee applicable to outright trades. Although Interactive Brokers charged customers the higher fee, it paid the exchange the lower fee applicable to spread trades.

As a result, Interactive Brokers overcharged its customers a total of $710,828.14. Interactive Brokers represents that where it confirmed that a current customer was overcharged, it refunded the amount of the overage. Interactive Brokers also notified former affected customers about how to obtain their overage refund.

The CFTC requires Interactive Brokers to pay $710,828.14 in disgorgement with credit for money paid to affected customers, and pay a $300,000 civil monetary penalty.

At the same time, the commission charged South Africa-based bitcoin pool operator Mirror Trading International with $1.7 billion fraud, alleging the global, multilevel marketing scheme "misappropriated" all of the bitcoin it amassed.