The brokerage firm that operates America’s largest electronic trading platform is facing a class action lawsuit in California stemming from a $23 million Ponzi scheme that plaintiffs say it aided and abetted.
The lawsuit concerns Haena Park, a trader who used Interactive Brokers as her futures commission merchant and in 2017 was sentenced to three years in prison for defrauding investors. It alleges that Interactive Brokers was aware of Park’s suspicious activity, which was flagged by the firm’s own compliance department, but that it continued to let Park to use its services because she was a valuable customer.
Park would go on to lose $14 million of her investors’ money through her Interactive Brokers account.
The class action suit is the latest development in a long-running scandal that has already cost Interactive Brokers $38 million in settlements.
The Wall Street Journal reported last August that the brokerage had agreed to a spate of settlements after several US regulatory agencies said that it had failed to maintain an adequate anti-money-laundering program, which allowed hundreds of millions of dollars in wire transfers to go unmonitored. The SEC and Commodity Futures Trading Commission (CFTC) each levied civil penalties of $11.5 million against the firm, while the Financial Industry Regulatory Authority (FINRA) fined it $15 million.
According to the terms of the settlements, Interactive Brokers neither admitted to or denied the agencies’ findings.