Oops. Those crazy porn-surfers at the Securities and Exchange Commission inadvertently posted a confidential earnings report from Citadel’s brokerage and market making unit on their website. The report, picked up by Bloomberg News, shows Citadel Securities posted earnings of $81.6 million on revenue of $1.01 billion last year.
The "inadvertent" leak by the SEC justifies some fears by the hedge fund community about registering and turning over proprietary information to the agency.
When combined with Citadel’s massive hedge funds, the firm said it accounts for about 8 percent of U.S. stock-market transactions and 30 percent of trading in listed equity options, according to the February letter to the SEC.
More from Bloomberg:
According to the confidential filing, Citadel Securities reported $621.6 million of revenue from principal transactions and another $300.4 million from clearance income. The principal transactions category included $717 million in gains recognized last year from trading equity derivatives such as options.
Net income for 2009 included the $60 million reimbursement from a non-hedge-fund affiliate for expenses incurred to expand its primary businesses, including investment banking and securities dealing. The payment was meant to offset expenses that “would have otherwise been borne” by Citadel Derivatives Group Investors LLC, a private fund that owns at least 50 percent of Citadel Securities, the filing shows.
Several investors in the Citadel Derivatives partnership reported in regulatory filings that they earned a 6.8 percent return last year from the fund, down from 36 percent in 2008. The partnership was set up to hold a stake in the market-making operation that was previously owned by Citadel Wellington LLC, one of the firm’s largest hedge funds.