A recent SEC settlement with Interactive Brokers underscores the need for true commitment to compliance. Guidepost Solutions’ Megan Prendergast Millard offers four takeaways from Interactive Brokers’ AML scandal.
Too often in companies across the financial services sector, the financial commitment to the compliance department does not keep pace with the rate of business growth. Interactive Brokers Group – which provides automated trade execution and custody of securities, commodities and foreign exchange in over 135 markets and in scores of countries and currencies – learned recently that harsh regulatory penalties can accompany such growing pains.
Interactive Brokers, ranked by Barron’s as one of the top online brokers, agreed to pay $38 million to settle claims by a slate of U.S. regulators because of the company’s failure to maintain an adequate anti-money-laundering (AML) program for more than five years. The U.S. broker-dealer, which serves a wide range of international clients, allegedly hadn’t monitored hundreds of millions of dollars of customers’ wire transfers for money-laundering concerns and failed to report potential manipulation of microcap securities in customer accounts, according to The Wall Street Journal.
The company’s compliance breakdown has far-reaching implications….
