Sadis Wins $1.9 Million Award For Hedge Fund Client Against Interactive Brokers

Sadis & Goldberg won a major FINRA Arbitration Award against Interactive Brokers (“IB”) in late-September 2021, for a hedge fund client that suffered losses due to a malfunction in IB’s trading system when WTI Oil Futures traded at negative prices. ICE WTI Oil Futures traded at negative prices on April 20, 2020, and settled at -$37.63. Sadis’s trial team proved that IB’s failure to execute trades at negative prices caused over $1.88 million in losses.

This is Sadis’s third straight victory against IB. Sadis has now won three of the five largest FINRA Arbitration awards ever against Interactive Brokers, according to Brokercheck.

Sadis’s victory is particularly impressive, because the CFTC investigated IB for this same conduct, but declined to order IB to repay Sadis’s client. Instead, the CFTC only ordered IB to forgive debts of customers whose accounts fell to negative balances due to a related defect in IB’s margin system. Thus, Sadis won a victory for its client that went beyond what the CFTC ordered.

Sam Lieberman, Partner and Co-Head of Litigation, led Sadis’s trial team, which included associates Ben Hutman and Jesse Kantor. If you have any questions about this case, or any broker or securities case, please contact Sam Lieberman at slieberman@sadis.com.