Interactive Brokers Group, Inc.

13. Commitments, Contingencies and Guarantees

Legal, Regulatory and Governmental Matters

The Company is subject to certain pending and threatened legal, regulatory and governmental actions and proceedings that arise out of the normal course of business. Given the inherent difficulty of predicting the outcome of such matters, particularly in proceedings where claimants seek substantial or indeterminate damages, or which are in their early stages, the Company is generally not able to quantify the actual loss or range of loss related to such legal proceedings, the manner in which they will be resolved, the timing of their final resolution or the ultimate settlement. Management believes that the resolution of these matters will not have a material effect, if any, on the Company’s business or financial condition, but may have a material impact on the results of operations for a given period.

The Company accounts for potential losses related to litigation in accordance with FASB ASC Topic 450, “Contingencies.” As of September 30, 2026 and 2025, accruals for potential losses related to legal, regulatory and governmental actions and proceedings matters were not material.

Class Action Matter

On December 18, 2015, a former individual customer filed a purported class action complaint against IB LLC, IBG, Inc., and Thomas Frank, Ph.D., the Company’s Executive Vice President and former Chief Information Officer, in the U.S. District Court for the District of Connecticut. The complaint alleged that a purported class of IB LLC’s customers were harmed by alleged “flaws” in the computerized system used to close out (i.e., liquidate) positions in customer brokerage accounts that have margin deficiencies. The complaint sought, among other things, undefined compensatory damages and declaratory and injunctive relief.

On September 28, 2016, the District Court issued an order granting the Company’s motion to dismiss the complaint in its entirety, without leave to amend. After plaintiff appealed the dismissal to the United States Court of Appeals for the Second Circuit, on September 26, 2018, the Court of Appeals affirmed the dismissal of all claims other than negligence claims, which were remanded back to the District Court. On September 30, 2019, the District Court denied the Company’s motion to dismiss plaintiff’s subsequent amended complaint. On August 25, 2023, the District Court certified a class that consisted of IB LLC account holders who were U.S. residents (with some exclusions) and who had positions liquidated during the period from December 18, 2013, to the date of trial at prices outside of a “pricing corridor” defined in the Court’s decision.

On January 20, 2026, the parties signed a class action settlement agreement. The Court preliminarily approved the settlement on January 27, 2026, and gave final approval of the settlement after a fairness hearing on June 17, 2026, dismissing all claims with prejudice. Under the terms of the settlement agreement, the Company paid $5 million to the class and IB LLC forgave approximately $1.8 million of debts owed by certain class members, with no admission of liability, in exchange for a release of claims.

Guarantees

Certain of the operating subsidiaries provide guarantees to securities and commodities clearing houses and exchanges which meet the accounting definition of a guarantee under FASB ASC Topic 460, “Guarantees.” Under standard membership agreements, clearing house and exchange members are required to guarantee collectively the performance of other members. Under the agreements, if a member becomes unable to satisfy its obligations, other members would be required to meet shortfalls. In the opinion of management, the operating subsidiaries’ liability under these arrangements is not quantifiable and could exceed the cash and securities they have posted as collateral. However, the potential for these operating subsidiaries to be required to make payments under these arrangements is remote. Accordingly, no contingent liability is carried in the condensed consolidated statements of financial condition for these arrangements.

In connection with its retail brokerage business, IB LLC or other brokerage operating subsidiaries perform securities and commodities execution, clearance and settlement on behalf of their customers for whom they commit to settle trades submitted by such customers with the respective clearing houses. If a customer fails to fulfill its settlement obligations, the respective operating subsidiary must fulfill those settlement obligations. No contingent liability is carried on the condensed consolidated statements of financial condition for such customer obligations.

Other Commitments

Certain clearing houses, clearing banks and firms used by certain operating subsidiaries are given a security interest in certain assets of those operating subsidiaries held by those clearing organizations. These assets may be applied to satisfy the obligations of those operating subsidiaries to the respective clearing organizations.