Was Citadel Securities Not Supposed To Sit On Client Orders To Fill Its Own? - Dealbreaker

Ken Griffin is known to be rather particular about the security and use of his trade secrets. And, as it turns out, those of his clients as well.

Over a two-year period until September 2014, the market-maker removed hundreds of thousands of large OTC orders from its automated trading processes, according to Finra. That rendered the orders “inactive” and so they had to be handled manually by human traders.

Citadel Securities then “traded for its own account on the same side of the market at prices that would have satisfied the orders,” without immediately filling the inactive orders at the same or better prices as required by Finra rules, the regulator said….

Nearly half of the 467 limit orders reviewed by the regulator in the six years until September 2018 were found to violate Finra’s requirements to display orders. The bulk of the violations were for failing to execute trades against existing quotations in a timely manner, Finra said.

Whoever could have seen such a conflict of interest coming at a trading outfit owned by a hedge fund manager?

US regulator fines Citadel Securities over trading breach [FT]

Related

KenGriffin

Ken Griffin Locks Up Two Dozen Employees To Keep The Liquidity Flowing

They can look out at the beach—but definitely aren’t allowed to go to it.

KenGriffin

Ex-Citadel Exec. Not Screwing Around

Daniel Nehren wants to make sure Ken Griffin knows exactly how little he’s been doing for the last eight months.

miami2

Is Citadel Moving To Miami? A Dealbreaker Investigation

Ken Griffin’s suddenly got lots of places to stay in a city where Citadel has no office.

kengriffin

Ken Griffin’s Need To Stretch His Legs In New York Knows No Bounds

Eventually, Citadel Securities will occupy all of the office space in Manhattan, but for now will settle for an extra 12,000 square feet.

KenGriffin

Ken Griffin’s Shopping Spree Continues Apace

A mansion in L.A. here, perhaps a pied-a-terre in London there, and oh yea a market-maker with some change fished out of a couch.

KenGriffin

Job Opening At Citadel

If you’ve got a feel for Hungarian debt, Ken Griffin would like to talk to you. For a little while, anyway.