Interactive Brokers Faces Lawsuit Over Park Fraud
Posted by Colin Lambert. Last updated: August 17, 2021
A class action has been filed in California against Interactive Brokers alleging the firm aided and abetted fraud and breached its ficuciary duty.
In 2020, Interactive Brokers was fined $38 million by three US authorities, the SEC, Finra and CFTC, for failure to supply Suspicious Activity Reports and other anti-money laundering failures, the latest action is picking up on those fines.
The case relates to that of Haena Park, an Interactive Brokers client who was convicted and jailed for three years for operating a Ponzi scheme and embezzlement. It alleges that although Interactive Brokers knew Park was defrauding investors, it chose to profit from – rather than expose – the scheme. It further alleges that the firm learned of Park’s scheme in the course of performing its customer due diligence obligations, and that it deviated from its standard compliance protocols and covered up red flags so Park’s scheme could continue.