Its preemptive protestations of guileless innocence notwithstanding, the Citadel family of companies has attracted precisely the sort of attention in l’affaire GameStop it had hoped to thusly avoid: from angry Redditors and their lawyers; from unfriendly leaders in Congress; from unscrupulous attorneys general who know a thing about securities fraud themselves.

But Wall Street and r/WallStreetBets, hear him out! Ken Griffin is not your oppressor but your friend! Not your persecutor but your protector from the very sort of shenanigans which you accuse him of, by the very people that the ludicrously uninformed Michael Lewis has wrongly championed as your champions! People of the retail securities market, unite with him against your true enemies, upstart anti-high-speed-trading exchange IEX and its swampy enablers at the SEC!

Citadel Securities asked a court to overturn the SEC's bipartisan approval of a trading method launched by IEX Group… IEX says D-Limit acts like a regular limit order except when the exchange's algorithms predict a price is about to change./

However, Citadel Securities is arguing D-Limit does the opposite of protecting investors…. Citadel Securities accused the SEC of having "ignored" evidence that retail investors would be "harmed" by the D-Limit order. The firm cited its own analysis that found more than half of its trading activity on IEX was on behalf of retail investors, not for its own profit….

"Imagine a grocery store that has deliberately installed extra-long conveyor belts on its checkout lines," the company argues in the filing. In theory, the store could use that extra time to determine if any items have sold out at rivals' stores./"If so, the store's computers quickly raise its own price before your item reaches the cashier," the filing says.

Yes, says the IEX and its allies: Imagine it. Because that’s all it is: Ken Griffin’s lurid, self-serving imagination.

IEX's D-Limit, along with the exchange's other technology, can "protect investors against predatory" trading strategies, Lev Bagramian, senior securities policy advisor at Better Markets, told CNN Business in an email./

Kelleher said D-Limit would shield investors specifically from Citadel Securities -- and by extension hurt the firm's booming revenue.

"Presumably that's why Citadel vehemently opposed IEX's D-Limit order type," Kelleher said.

High-speed trading firm linked to Robinhood is going to war with the SEC [CNN Business]
Reddit crowd turn fire on market maker Citadel [Telegraph]
Elizabeth Warren wants answers on Robinhood’s ties to large hedge funds [CNN Business]
Citadel, Robinhood on Waters’s ‘Wish List’ for GameStop Hearing [Bloomberg]

Related

gamestop 3

SEC Monitoring GameStop Frenzy With Eye Towards Doing Nothing

Letting the Redditors have their fun seems to be a bipartisan point of agreement, which is great, because it probably can’t be stopped.

robinhood

Robinhood Finds Sympathetic Regulatory Shoulder To Settle With

FINRA can always be counted on to offer a relative bright spot in a legal and regulatory hellscape.