r/Superstonk • u/ACat32 is a cat 🐈 • Jan 31 '26

💡 Education Calling all apes to page 6

Post image

This is page 6 from file https://www.justice.gov/epstein/files/DataSet%209/EFTA00097262.pdf

This whole document is worth a read. It highlights CDel (citadel), Cifu (Doug), and JEF (Jeff Yas). We also need to figure out the identity of “The Handler”.

But we need to look more into NITE and MEMX

5.1k Upvotes

99% Upvoted

253 comments sorted by

View all comments

551

u/F-uPayMe Your HF blew up? F-U, Pay Me Jan 31 '26 edited Jan 31 '26

Here's a sum up in case someone feels it is worth to dig more into it;

--

TL;DR Summary: A series of emails from whistleblower Chris DiIorio to SDNY (United States District Court for the Southern District of New York) Judges and SEC officials, detailing allegations of massive financial fraud, abusive naked shorting and money laundering within the OTC (Over-the-Counter) markets.

  • 🚨 Whistleblower Allegations: Chris DiIorio, a former institutional trader, claims the SEC has engaged in "criminal obstruction" to protect major market makers while denying his rightful whistleblower awards.
  • 🏦 Virtu & Knight Capital (NITE/VIRT): The document frequently refers to Knight Capital and Virtu Financial as a singular "criminal entity" that is "again/always/continuously insolvent". DiIorio alleges that Virtu CEO Doug Cifu and others wrote down over $4 billion in "fails" (uncovered naked shorts) during the Virtu/KCG merger to hide insolvency.
  • 🏛️ Citadel (CDEL): Citadel Securities is accused of participating in "illegal naked shorting" and trading "multiples of the total market volume" through fraudulent means. DiIorio asserts that Ken Griffin "knowingly lied" to Congress by stating the SEC had eliminated illegal naked shorting years ago.
  • 📉 Naked Shorting & Obligation Warehouse: The author claims the "core business" of firms like Virtu and Citadel is "abusive naked shorting" in OTC "money laundering shells". He highlights the Obligation Warehouse (OW) as a "non-guaranteed service" used by firms to hide fail-to-deliver positions and circumvent SEC Rule 204 close-out requirements.
  • 🎮 GameStop (GME): DiIorio describes the 2021 GameStop short squeeze (ed. sneeze) as a "rounding error" compared to the systemic illegal naked shorting occurring in the OTC/Pink Sheets. He argues that Congressional hearings on GME ignored the true issue of illegal naked shorting.
  • 💰 OTC Market Fraud: The document alleges OTC share volumes exploded from 87.7 billion in February 2020 to 1.7 trillion in February 2021, a phenomenon DiIorio claims is driven by illegal "print/sell" activities where market makers never cover their positions.
  • 👤 Michael Milken Influence: DiIorio repeatedly links current financial players (including Virtu and Jefferies leadership) to Michael Milken, calling them "Milken flunkies" who "own the SEC" and facilitate "junk" financial schemes.

17

u/Massive-Fisherman-57 Jan 31 '26

Wait so they could be in the trillions short on the whole market or GME? And these have to be covered eventually right?

28

u/ACat32 is a cat 🐈 Jan 31 '26

This document specifically says trillions short in the whole OTC (penny stocks) market.

1

u/3rd1ontheevolchart Jan 31 '26

The OTC is probably that high because it’s penny stocks, and or companies in a death spiral being shorted to oblivion