Finra hits Interactive Brokers with $5.5m fine

A unit of Interactive Brokers Group has been hit with a $5.5m fine by a Wall Street regulator for alleged violations of rules involving naked short selling. 

The regulator, Finra, said on Monday that Interactive Brokers LLC, a US-based electronic brokerage firm, had fallen afoul of Regulation SHO, a rule that is meant to prevent abusive naked short selling.

Finra said that between July 2012 and June 2015, Interactive’s oversight was not enough to ensure compliance with the regulation, and that it “repeatedly ignored ‘red flags’” until mid-2015, when it took corrective steps. 

Interactive neither admitted nor denied the findings, Finra said. A company spokeswoman said that it had “cooperated with Finra during its inquiry and took corrective action on the matters raised by Finra in 2015.”

Earlier this year, the UK arm of Interactive Brokers was fined by the UK’s financial watchdog for patchy market-abuse controls and failing to report suspicious transactions.