US regulator fines Citadel for trading ahead of retail customer orders

https://www.ft.com/content/dc3f8fb5-62e7-4774-98bb-28db801589ee

by cs702 • 6 years ago

39 6 6 years ago

ft.com

aprao• 6 years ago

Non paywall link from another website: https://www.financemagnates.com/institutional-forex/regulati...

maerF0x0• 6 years ago

or https://archive.is/HbNc1

armitron• 6 years ago

"Citadel Securities generated $3.5 billion of revenue in 2018."

I bet they are very upset at having to pay a $700000 fine.

ac29• 6 years ago

As part of the restitution mandated by FINRA, Citadel Securities will provide restitution to each corresponding firm client for the customer orders that it executed at prices worse than it traded for its own account

Seems like this could potentially be much more than the $700k fine.

TheJoeMan• 6 years ago

Isn't this the company that Robinhood sends the orders to?

elliekelly• 6 years ago

In particular, FINRA claims that following the establishment of its OTC equity trading desk, the firm sought to program the desk’s trading systems to comply with the Trading Ahead and Limit Order Display Rules by providing customer orders automated order protection, quote display, and execution.
“The OTC Desk, however, implemented controls, settings and processes that removed hundreds of thousands of mostly larger customer orders from those logics. While those controls, settings and processes had multiple purposes, they shared a principal purpose of directing OTC customer orders for manual review and/or handling. Impacted orders were rendered inactive until the completion of a manual trader review,” FINRA said in the document earlier this month.

How interesting. This is almost certainly a case of the lawyers/compliance talking to the programmers/ops and everyone thinking they’re on the same page with how the process needs to work only to find out years later that they weren’t.

I wonder how this issue was even identified.

US regulator fines Citadel for trading ahead of retail customer orders

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