Yep, all my liquid assets are at IB, and I’ve traded lots of microcaps there. Earlier this year I was able to buy shares in a petroleum trust with under a half million dollar market cap!
I haven’t used it as it, but Interactive Brokers is something like 10-100x cheaper if you need to wire cash from US to your country when compared with Transferwise and such.
and all the fintech apps have arbitrary and annoying limits. If you want to move anything over $1,000,000 and not be bothered or worried about being bothered, none of those fintech apps in US or Europe can do it.
but it also helps when the big financial institutions aren't filing Suspicious Activity Reports (SARs) to begin with lol, they dgaf
I don’t know much about Interactive Brokers, but compare this fine with the measly fine (13k) issued to Smithfield for workplace safety violations which lead to thousands of cases of covid and 4 employee deaths. Why are the fines for financial noncompliance like this orders of magnitude higher than fines for killing people?
I think it's mostly the same reason sales people get paid a lot. It's that the calculation is straightforward and obvious, mostly because it never requires an exchange between conceptually different values. Adding translation steps like "lives lost" => USD introduces a lot of conflict and ambiguity. So we tend to fail at it.
Both types of crimes are rarely investigated and the investigators grossly underfunded. Wage theft and financial crimes at scale should be automatic jail time, ankle monitors, barred from positions of authority, urinalysis, and seizures of all assets involved in or tainted by the crimes. I have zero patience for white collar criminals walking free bragging about their exploits.
We lock up people for decades for holding plants but I can steal decades of wages from my staff and get weekend jail, a 1% fine or probation? Ridiculous. A true crime against humanity.
It's good to see the SEC doing its job. It's not enough but it's progress. Ultimately, we need to bring back accountability by abolishing corporate personhood.
If corporations were treated the same as people, most of them would be incarcerated for life or on death row by now. The current approach of fining them gives them unlimited chances to illegally exploit the system.
If I profited from doing something illegal, I would be jailed as an accomplice. If a corporation does it, the executives can simply claim that they didn't know. This is fundamentally unfair.
The result is that nobody is responsible for any of the millions of bad things which happen in the world. Those who implement or are aware of the wrongdoings (the employees) don't have the power to change anything. This lack of responsibility is especially dangerous in our technology-driven age.
You can't get rid of corporate personhood. In the absence of that concept, one would have to sue each shareholder or executive of a corporation individually in order to bring any kind of liability suit. Allowing a corporation to be recognized as a single, fictional entity is a useful tool.
A better solution is making executives criminally liable for the actions of the company, the same way HIPAA holds executives and directors of covered entities personally liable for breaches.
Is there is some objective way that the SEC or FINRA detected activity that IB failed to report? If so does there exist an opportunity for software or systems that automate this for market participants? Suspicious Activity as a Service (SAaaS)?
I can't even begin to wrap my head around the infrastructure you'd need to handle this much daily traffic, considering it'll almost definitely be stored longer term, never mind how you'd go about querying it in any sensible manner. It's something upwards of 100 million trades per day
> Is there is some objective way that the SEC or FINRA detected activity that IB failed to report?
Probably not.
I suspect there was an IB-employed whistleblower... or perhaps what happened was that the SEC was already investigating some IB customer (for insider trading, market manipulation, etc.) and then, having become aware of one or more transactions that should have been reported, went digging at IB to see what else hadn't been.
> Firm Will Pay a Total of $38 Million in Penalties to Settle With Regulators
$38 million!?!? That's a expensive mistake for not submitting some paperwork that should be automated.
I'd like to see a list of international government agencies and what they can/do charge for penalty fines. I suspect that the United States SEC sets a high bar compared to some of the smaller fines I've seen elsewhere. GDPR appears to be one of the top contenders
Yeah. I feel like putting a rule that if an account trade volume exeeeds 1% of average daily volume for a stock then submit the report wouldn't be too hard. Could be done offline during trade settlement. I'm wondering if there's more rigid requirements about when to submit them.
the US Patriot act / FINRA was created as a job creation measure. It is essentially an indirect tax on banks to increase jobs after the stock market crash of 2001 ("compliance").
I'm not sure who you're replying to, but it's a "self-regulatory organisation". In practice it has very similar powers to the SEC and brokers take it equally seriously: it can fine you or wind down your business. It's not the Better Business Bureau.
You might think, oh, FINRA is just a private company, I'll just ignore them and laugh off their attempt to sanction me. This doesn't go any better than if you do the same with the SEC. If you decide to fight a FINRA enforcement action, it gets appealed first to the SEC and then if you keep appealing it, to the courts. Exactly the same process as if you were to fight one from the SEC.
FINRA is owned and run by its members so you might think it would be favourable to the brokerage industry. Which it probably is, a bit, but it doesn't seem to get accused of regulatory capture any more frequently or any more fairly than the SEC.
[+] [-] Havoc|5 years ago|reply
>microcap securities
If you want to trade non-mainstream stuff at decent rates IB is the main game in town. Which naturally makes them home for a more eclectic crowd.
You can't go to your local community bank and say you want to buy shares in the maker of Cyberpunk 2077...on the Warsaw exchange. IB you can.
Different risk profile...and that exposure comes with fkups
[+] [-] valuearb|5 years ago|reply
[+] [-] maest|5 years ago|reply
[+] [-] dzhiurgis|5 years ago|reply
[+] [-] literallycancer|5 years ago|reply
[+] [-] vmception|5 years ago|reply
but it also helps when the big financial institutions aren't filing Suspicious Activity Reports (SARs) to begin with lol, they dgaf
[+] [-] noodlesUK|5 years ago|reply
[+] [-] _jal|5 years ago|reply
"We" value capital more than workers. The law reflects that.
[+] [-] pmichaud|5 years ago|reply
[+] [-] Red_Leaves_Flyy|5 years ago|reply
We lock up people for decades for holding plants but I can steal decades of wages from my staff and get weekend jail, a 1% fine or probation? Ridiculous. A true crime against humanity.
[+] [-] unknown|5 years ago|reply
[deleted]
[+] [-] cryptica|5 years ago|reply
If corporations were treated the same as people, most of them would be incarcerated for life or on death row by now. The current approach of fining them gives them unlimited chances to illegally exploit the system.
If I profited from doing something illegal, I would be jailed as an accomplice. If a corporation does it, the executives can simply claim that they didn't know. This is fundamentally unfair.
The result is that nobody is responsible for any of the millions of bad things which happen in the world. Those who implement or are aware of the wrongdoings (the employees) don't have the power to change anything. This lack of responsibility is especially dangerous in our technology-driven age.
[+] [-] arrosenberg|5 years ago|reply
A better solution is making executives criminally liable for the actions of the company, the same way HIPAA holds executives and directors of covered entities personally liable for breaches.
[+] [-] sschueller|5 years ago|reply
[+] [-] unknown|5 years ago|reply
[deleted]
[+] [-] jeffbee|5 years ago|reply
[+] [-] james412|5 years ago|reply
better article: https://www.refinitiv.com/perspectives/future-of-investing-t...
I can't even begin to wrap my head around the infrastructure you'd need to handle this much daily traffic, considering it'll almost definitely be stored longer term, never mind how you'd go about querying it in any sensible manner. It's something upwards of 100 million trades per day
[+] [-] webmaven|5 years ago|reply
Probably not.
I suspect there was an IB-employed whistleblower... or perhaps what happened was that the SEC was already investigating some IB customer (for insider trading, market manipulation, etc.) and then, having become aware of one or more transactions that should have been reported, went digging at IB to see what else hadn't been.
[+] [-] A4ET8a8uTh0|5 years ago|reply
[+] [-] natcombs|5 years ago|reply
$38 million!?!? That's a expensive mistake for not submitting some paperwork that should be automated.
I'd like to see a list of international government agencies and what they can/do charge for penalty fines. I suspect that the United States SEC sets a high bar compared to some of the smaller fines I've seen elsewhere. GDPR appears to be one of the top contenders
https://www.tessian.com/blog/biggest-gdpr-fines-2020/
[+] [-] JumpCrisscross|5 years ago|reply
It’s very difficult to automate SARs. In part due to them requiring a compliance officer personally signing off on their validity.
[+] [-] awinder|5 years ago|reply
[+] [-] dclusin|5 years ago|reply
[+] [-] epa|5 years ago|reply
[+] [-] tmaly|5 years ago|reply
[+] [-] xxpor|5 years ago|reply
[+] [-] dmurray|5 years ago|reply
You might think, oh, FINRA is just a private company, I'll just ignore them and laugh off their attempt to sanction me. This doesn't go any better than if you do the same with the SEC. If you decide to fight a FINRA enforcement action, it gets appealed first to the SEC and then if you keep appealing it, to the courts. Exactly the same process as if you were to fight one from the SEC.
FINRA is owned and run by its members so you might think it would be favourable to the brokerage industry. Which it probably is, a bit, but it doesn't seem to get accused of regulatory capture any more frequently or any more fairly than the SEC.
[+] [-] zcrackerz|5 years ago|reply
[+] [-] whackamole|5 years ago|reply
[deleted]
[+] [-] unknown|5 years ago|reply
[deleted]