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Customers who had a margin account with Interactive Brokers LLC that the company's automated liquidation algorithm software liquidated in whole or in part between Dec. 18, 2013, and July 14, 2025, may be eligible to receive a cash payment and/or debt release from a class action settlement.
Interactive Brokers LLC, Interactive Brokers Group Inc. and Thomas A. Frank agreed to pay $5 million to settle a class action lawsuit alleging they acted negligently in designing, coding, testing, maintaining and using automated liquidation algorithm software. The lawsuit claimed the software caused unintended losses for customers whose margin accounts the software liquidated.
Who are the class members?
The settlement class includes all United States residents who had margin accounts with Interactive Brokers LLC at any time between Dec. 18, 2013, and July 14, 2025, where the automated liquidation algorithm software executed at least one trade for which the actual execution price produced a ratio of [margin improvement] / [cost to liquidate] greater than zero but less than three.
Additional details
- Interactive Brokers LLC identified class members using its account records.
- Class members who received a notice by email or postcard are likely eligible.
- Class members can select how to receive their payment by following instructions on the settlement website.
How much can class members get?
The total settlement fund is $5,000,000. The notice each class member received by email or postcard includes an estimated payment amount and any applicable debt release. The amount each class member will receive depends on several factors:
- The total number of eligible class members
- The damages attributed to each class member's account
The settlement administrator will distribute payments on a pro rata basis according to the following formula:
- Individual payment = (class member's damages / total class damages) x net settlement fund
- The net settlement fund is the total settlement fund minus attorneys' fees, litigation costs, the service award and administration expenses.
How to receive an Interactive Brokers class action settlement payment
Class members do not need to file a claim to receive a settlement payment. Eligible class members who do not opt out will automatically receive a payment after the court resolves any appeals and grants final approval to the settlement. Class members may choose a payment election and update their contact information online with the settlement administrator if their contact information changes.
Settlement administrator contact information: Interactive Brokers Software Settlement, c/o Settlement Administrator, P.O. Box 25226, Santa Ana, CA 92799-9958
Email: info@InteractiveBrokersSettlement.com
Phone: 833-647-9087
$5 million settlement fund
The $5,000,000 settlement fund includes:
- Settlement administration costs: To be determined
- Attorneys' fees: Up to $1,650,000
- Attorneys' expenses: Up to $1,700,000
- Service award to class representative: $100,000 total
- Payments to eligible class members: Remainder of the fund
Important dates
- Opt-out deadline: May 27, 2026
- Fairness hearing: June 17, 2026
When is the Interactive Brokers class action settlement payout date?
The settlement administrator will issue payments after the court grants final approval and resolves any appeals.
Why did this class action settlement happen?
The class action lawsuit alleged Interactive Brokers LLC, Interactive Brokers Group Inc. and Thomas A. Frank acted negligently in designing, coding, testing, maintaining and using automated liquidation algorithm software. The plaintiffs claimed the software caused unintended losses for customers whose margin accounts the software liquidated.
The defendants denied all allegations of wrongdoing but agreed to settle to avoid the costs, risks and uncertainties of continued litigation.
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