US Tiger and TradeUP Securities have settled with the Financial Industry Regulatory Authority (FINRA) over a series of compliance violations, including failures related to their anti-money laundering (AML) programs and the retention of electronic communications.
Firms Fined for Inadequate AML Practices
Both firms, which are affiliated and owned by an offshore holding company, serviced foreign financial institution omnibus accounts involved in trading thinly traded, low-priced securities.
Between November 2019 and March 2021 (for US Tiger) and between April 2021 and June 2023 (for TradeUP), the firms' AML programs were deemed inadequate for detecting and reporting potentially suspicious transactions. Additionally, the firms failed to conduct proper due diligence on correspondent accounts for foreign financial institutions.
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Firms Penalized for Communication Retention Failures
The violations extended to the firms' electronic communication systems. From January 2019 to November 2021, US Tiger and TradeUP used a messaging and document-sharing platform that automatically deleted communications, breaching retention rules under the Exchange Act and FINRA regulations.
According to FINRA Rule, member firms must retain all communications for a minimum of three years. However, both firms failed to implement procedures to preserve and review the communications sent via the platform.
As a result of these violations, US Tiger has been fined $250,000, while TradeUP faces a larger fine of $700,000. In addition, TradeUP must hire an independent consultant to review and enhance its compliance procedures. Both firms have been censured as part of the settlement.
“US Tiger Securities, Inc. and TradeUP Securities, Inc. entered into a settlement with FINRA in April 2025, and accepted a censure and the imposition of monetary fines in the amounts of $250,000 and $700,000, respectively,” a spokesperson from Tiger Brokers commented.
“In addition, TradeUP will also engage a third party independent consultant to further review and monitor the progress of its compliance improvements. The firms permanently ceased using the referenced messaging platform in November 2021, and took substantial steps both institutionally and technically to strengthen their AML programs and due diligence review on high-risk accounts."
Interactive Brokers Pays $2.25 Million Settlement
Earlier, FINRA settled with Interactive Brokers over free-riding violations in customer cash accounts from October 2015 to December 2022. The firm failed to detect over 4.2 million free-riding instances in options transactions, violating Regulation T and FINRA rules.
Interactive Brokers was fined $2.25 million, censured, and updated its surveillance systems and supervisory procedures. The settlement is recorded in the firm’s public records. No further comments were received from the firm.
