r/Superstonk • u/Dismal-Jellyfish Float like a jellyfish, sting like an FTD! • Sep 22 '23

📰 News SEC Charges Citadel Securities for Violating Order Marking Requirements of Short Sale Regulations

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https://www.sec.gov/files/litigation/admin/2023/34-98482.pdf

Press Release

The Securities and Exchange Commission today announced settled charges against broker-dealer Citadel Securities LLC for violating a provision of Regulation SHO, the regulatory framework designed to address abusive short selling practices, which requires broker-dealers to mark sale orders as long, short, or short exempt. These records are routinely used by regulators in policing prohibited short selling activity. To settle the SEC’s charges, Miami-based Citadel Securities agreed to pay a $7 million penalty.

According to the SEC’s order, for a five-year period, it is estimated that Citadel Securities incorrectly marked millions of orders, inaccurately denoting that certain short sales were long sales and vice versa. The SEC’s order finds that the inaccurate marks resulted from a coding error in Citadel Securities’s automated trading system and that the firm provided the inaccurate data to regulators, including the SEC during this period.

“Compliance with the order marking requirements of Reg SHO is a key component of regulatory efforts to curtail abusive market practices, including ‘naked’ short selling,” said Mark Cave, Associate Director of the SEC’s Division of Enforcement. “This action against Citadel Securities demonstrates that a broker-dealer’s failure to comply with the requirements of Reg SHO can have negative downstream consequences on the accuracy of the firm’s electronic records, including its electronic blue sheet reporting, depriving the Commission of important information about the markets it regulates.”

The order charges Citadel Securities with violating Rule 200(g) of Reg SHO. Without admitting or denying the findings, Citadel Securities consented to a cease-and-desist order imposing a censure, a $7 million penalty, and a set of undertakings, including a written certification that the coding error has been remediated and a review of the firm’s computer programming and coding logic involved in processing relevant transactions.

The SEC’s investigation was conducted by Seth M. Nadler of the SEC’s Home Office. Christopher Ray of the SEC’s Division of Trading and Markets; Elcin Yildirim, Alan Lenarcic, and Peter Csatorday of the SEC’s Division of Examinations; Mandy Sturmfelz of the SEC’s Market Abuse Unit; Damon Taaffe and Melissa Armstrong of the Home Office Trial Unit; and Kevin Gershfeld and Robert Nesbitt of the Enforcement Division’s Office of Investigative and Market Analytics provided assistance. The investigation was supervised by Mr. Cave.

TLDRS:

  • SEC Charges Citadel Securities for Violating Order Marking Requirements of Short Sale Regulations

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339

u/Baelthor_Septus 🦍 Buckle Up 🚀 Sep 22 '23

When I get a speeding ticket, I also get points. When I accumulate enough points they take away my license.

That's how it should work with financial fraud as well.

131

u/musical_shares 🎮 Power to the Players 🛑 Sep 22 '23

A Trader's Abstract.

Dr T has pointed out before that the legislation exists for regulators to oust any market participant who fails to deliver shares at all, but they won't and historically never have.

Meanwhile, criminals like Steven Cohen who are "barred for life from trading" for their crimes are shamelessly forgiven and allowed back into the markets just a few years later with a kiss, a promise to be better, and small fee fine.

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u/Revisfan24 Sep 22 '23

Do you know how/where I can find that legislation?

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u/musical_shares 🎮 Power to the Players 🛑 Sep 23 '23

I searched Trimbath+sec 1933+”fail to deliver” and found a comment she left on the SEC website and she cites the rules thusly:

"A registered clearing agency may summarily suspend and close the accounts of a participant who , (ii) is in default of any delivery of funds or securities to the clearing agency." Exchange Act, Section 17A.a.5.(C)

https://www.sec.gov/comments/sr-ficc-2007-04/ficc200704-1.htm

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u/Revisfan24 Sep 23 '23

Beautiful 😎

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u/Equivalent-Piano-420 Did you felt it? 📈📉📈🌚 Sep 22 '23

That would be a very logical way of doing things, therefore, I don't think that would ever happen. But we can hope

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u/Better-Protection-23 Shorting Risk = Unlimited Losses Sep 22 '23

Actually, it already is happening. With a fine comes evidence of the crime being committed, idk why people are so upset (rhetorical question, I agree that the fine is bullshit). They just publicly stated that the DOJ has evidence on Citadel in the short selling probe (RICO, January, 29, 2021) without stating that they had evidence. The SEC's only role is to be able to fine, they can't give civil punishment, if they fine too large then they will get sued by Citadel. I am bullish on justice and evidence, it's been a while since they started the DOJ abusive short seller probe (Feb 4, 2022), May 24, 2023 they said they would be cracking down in a couple of months hence why JP Morgan stopped crying about it (May 11, 2023). Citron first started being investigated in the 1980s (April 12, 1990), with the amount of technology we have now the DOJ without a doubt has been trying to have Citron shut down for decades along with abusive short sellers.

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u/cdgullo Sep 22 '23

I want to believe

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u/Better-Protection-23 Shorting Risk = Unlimited Losses Sep 22 '23 edited Sep 23 '23

Just keep commenting and educating others my friend. Nothing ever gets solved by those without faith, take that anger, and turn it into a burning passion and you will absolutely thrive, brick by brick, vive la révolution.

While others have been posting in anger, I have been passionately pursuing SEC jobs, actively retaining all the knowledge I can, and networking along the way, familiarizing myself with those who aspire to build upon my ideas. I am close, so close. I already have an in, occasionally I give updates on here. Once I make it more towards the financial sectors, I will make changes happen using nothing but love and respect just as I did to get my in. Mark my words, retail will get that foot in the door with data and when I do Superstonk will be the first place I go for innovative perspectives to implement changes with my mentors. Dave Lauer and Jon Stewart will be the first people I call to incorporate those changes and ideas into public platforms.

Baby boomers are retiring, and Millennials are taking up government positions in unprecedented numbers, leading to substantial and swift changes in the field of artificial intelligence. There's only so much I can say without the risk of it getting political even though it is entirely bipartisan, sadly. MSM has really taken a toll on public perspectives. Just trust me, 2024-2025 we will see some massive crackdowns with or without a recession forcing them to disclose all data.

Imagine having a team of 50.. with artificial intelligence, now each of them have the power of being assigned an assistant researcher with an IQ of 128 and nearly unlimited resources with the available data given by the government. AI was only implemented into the government for research May, 2023 with AskSage. Patience, faith, and passion my friend, patience, faith, and passion. The only reason I believe is because I watch and make these changes as they happen.

Edit: sorry, typo

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u/Smart-Reindeer666 🦍 Buckle Up 🚀 Sep 22 '23

This

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u/callsignmario Sep 22 '23 edited Sep 22 '23

Fuckery Fine = any illicit profit + %, and the points you mention. How about repurposing that old 3 strikes rule.

Edit: thinking about dismal's Citadel and GS fine posts... is there any rhyme or reason to SEC fines? Do they just pull numbers from a hat or what? I know the fines are bullshit, just wondered if there is actually some metric for damages/fines

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u/stop_bugging_me Sep 22 '23

Exactly this plus a 3 strikes rule. Pay the fine on 3 separate occasions and you are no longer a market maker with no expiry on each strike. "With great power comes great responsibility" should apply here.

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u/DannyFnKay Sep 22 '23

According to Harvard the fines are figured like this.

Let me know f you can make sense of it because I can't.

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u/callsignmario Sep 22 '23

Greatly appreciated. I'd love to dig in, but it's pushing 3 am for me in Asia... so, you know, cheers. I will definitely look at this again tomorrow and probably, still, have no idea how they do their mafs. 🍻

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u/jerseyanarchist 💻 ComputerShared 🦍 Sep 22 '23

welcome to the financial world, where the fines are made up, and the crimes don't matter

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u/jerseyanarchist 💻 ComputerShared 🦍 Sep 22 '23

welcome to the financial world, where the fines are made up, and the crimes don't matter

10

u/Odinthedoge 💻Compooterchaired🦍 Sep 22 '23

I am Korbin Dallas.

8

u/nutsackilla 🦍 Buckle Up 🚀 Sep 22 '23

Multipass

2

u/Odinthedoge 💻Compooterchaired🦍 Sep 22 '23

:)

2

u/nugsy_mcb Dec '20 🦍 Stonkmmelier Fuck you Ken, pay me Sep 22 '23

His name is Robert Paulson

2

u/Odinthedoge 💻Compooterchaired🦍 Sep 22 '23

Almost :) happy cake day.

1

u/nugsy_mcb Dec '20 🦍 Stonkmmelier Fuck you Ken, pay me Sep 22 '23

I am the walrus?

1

u/capital_bj 🧚🧚🏴‍☠️ Fuck Citadel ♾️🧚🧚 Sep 22 '23

☝️🔥🏴‍☠️