Interactive Brokers Class Action Lawsuit Over Allegedly Allowing Ponzi Scheme Practice
According to a new class action lawsuit, Interactive Brokers (IB) deliberately tolerated fraud on its platform, which aided in the perpetuation of a $23 million Ponzi scheme conducted by former broker Haena Park.
Haena Park’s Ponzi Scheme Recap
Park formerly worked as a registered broker at Morgan Stanley and Goldman Sachs.
Park was sentenced to jail in 2017 for defrauding family members and acquaintances, immigrants who have worked several jobs for decades, and a paraplegic person who lost $4 million after informing Park that he would soon retire due to his poor health.
In addition, Park promised investors up to 50% profits but resorted to fraud to conceal her losses, spending $23 million on faulty investments.
It Takes Two to Tango
On Monday, the Interactive Brokers was sued for its alleged role in the millions of dollars stolen, with plaintiffs alleging that the firm was aware Park’s account was being used to commit fraud but took no action.
They stated that her account had been reported for questionable behavior more than a dozen times.
Rather than scrutinizing the activity, freezing the account, and reporting Park to the authorities, IB overlooked its own compliance department’s potential problems and published internal compliance policies in order to aid Park, a lucrative IB customer, in continuing the scheme via its brokerage services, according to the Interactive Brokers lawsuit.
According to the complaint, the CFTC found an investment company accountable for violations of the Bank Secrecy Act for the first time in its history. The action seeks to recover damages from IB incurred as a result of the company’s misconduct and significant aid in the plan.
Interactive Brokers decided to settle the Securities and Exchange Commission (SEC) $38 million in 2020 for several instances of failing to file suspicious activity reports. Additionally, it was fined $15 million by Financial Industry Regulatory Authority (FINRA) for deficiencies with its anti-money laundering program.
Furthermore, Interactive Brokers Group LLC is among the largest brokerage companies in the world. The company shows a market capitalization of more than $9 billion and more than a million customer accounts.
Editor’s Note on Interactive Brokers Haena Park Ponzi Scheme Class Action Lawsuit 2021:
This article is written to inform you of the latest class action lawsuit against Interactive Brokers over allegedly aiding a Ponzi scheme. You might also be interested in knowing about the AT&T Reward Cards Scam.
Case Name & No.: Benjamin Chang v. Interactive Brokers LLC, Case No. 5:2021cv05967
Jurisdiction: US District Court – Northern District of California
Products/Services: Aiding and abetting fraud
Allegations: Interactive Brokers was allegedly aware of the fraud scheme by Haena Park but took no action
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