Tastytrade, a retail trading platform based in Chicago and a subsidiary of IG Group, has been fined $30,000 by FINRA. The penalty addresses the company’s failure to adequately monitor employees’ outside securities accounts between July 2021 and June 2023.
Investigation Findings
FINRA’s investigation revealed significant delays in reviewing 84 accounts linked to 35 employees. Some accounts remained unchecked for over a year, and 14 accounts went completely unreviewed until June 2023, when FINRA initiated a compliance examination. The regulator highlighted that Tastytrade lacked proper written supervisory procedures to ensure regular monitoring and documentation of employee trading activities.
Settlement and Compliance Updates
Tastytrade agreed to the fine and censure without admitting or denying FINRA’s findings. The company has since updated its supervisory systems and written policies to address the issues. These updates aim to strengthen its compliance framework and prevent similar lapses in the future.
Broader Regulatory Context
This case is part of FINRA’s broader efforts to ensure regulatory compliance in the retail trading industry. Interactive Brokers was fined $475,000 last month for violations related to its share lending program, and TradeZero America received a $250,000 fine earlier this year for compliance failures.
Financial Impact and Industry Position
The fine has had no apparent impact on IG Group’s stock price, which rose slightly following the announcement. Tastytrade remains a significant contributor to IG Group’s earnings, generating $71 million in revenue for the three months ending August 31, accounting for a quarter of the parent company’s total revenue.
Tastytrade’s Commitment to Compliance
Since joining FINRA in 2016, Tastytrade has operated with 73 registered representatives out of its Chicago headquarters. The firm views these updates as a step toward maintaining compliance and ensuring transparency as it continues to compete in the rapidly evolving retail trading sector.
