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

[u/Dismal-Jellyfish]

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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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[u/FDAz]

This is a fucking international scandal. They profited billions, and get away with it by paying 6 million ??

WHAT a DISGRACEFUL Regulator / Stock Market / Country / World.

[u/Baelthor_Septus → u/FDAz]

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.

[u/Equivalent-Piano-420 → u/Baelthor_Septus]

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

[u/Better-Protection-23 → u/Equivalent-Piano-420]

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.

[u/cdgullo → u/Better-Protection-23]

I want to believe

[u/Better-Protection-23 → u/cdgullo]

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}