Ken Griffin’s Citadel Fined $7M For Breaking Short-Sale Rules
Citadel Securities, an American market-making firm founded by famous investor Ken Griffin, has agreed to pay a $7mn fine to…
Citadel Securities, an American market-making firm founded by famous investor Ken Griffin, has agreed to pay a $7mn fine to settle accusations of breaching short-sale rules, the U.S. Securities and Exchange Commission (SEC) announced on Friday.
The SEC accused Miami-based Citadel Securities of incorrectly marking millions of trade orders, denoting certain short sales as long sales and vice versa. According to the agency, the inaccuracies occurred due to a coding error in Citadel’s automated trading system. The firm was nonetheless fined for providing incorrect data to regulators.
Citadel Securities is a market-making firm, which refers to firms that buy and sell large amounts of assets to infuse liquidity into a market and possibly earn profits from bid-ask spreads. In this case, Citadel Securities bought and sold stocks; it is one of the top-ten market makers on American stock markets.
This isn’t Citadel Securities’ first time getting fined for incorrect reporting. In 2018, the market maker paid a $3.5mn fine for submitting inaccurate or missing order execution data.
- Citadel Securities operates separately from Citadel LLC, the hedge fund Ken Griffin founded in 1990. Citadel LLC is one of the most successful hedge funds globally, managing over $60bn in assets as of December 2022. The fund reportedly generated $16bn in profit after fees in 2022, making it the top-earning hedge fund ever.
- Amid Citadel’s unprecedented success, Griffin reportedly took home $4bn in earnings in 2022, the highest annual pay on record for any hedge fund manager. Griffin has spread some dough around; he donated $300mn to Harvard University this April, $25mn to a children’s hospital in Miami this January; and over $100mn to state and federal campaigns in the 2022 U.S. midterm elections, primarily to Republican party members.
- Griffin commands a personal net worth of $37bn, according to the Bloomberg Billionaires Index. His fortune primarily comes from ownership stakes in Citadel Securities, the market-maker; Citadel LLC, the hedge fund; and personal investments in Citadel LLC’s funds.
Citadel Securities neither admitted nor denied the SEC’s accusations as part of the settlement.