Citadel Securities denies any involvement in trade restrictions on “meme shares”



A GameStop store is seen in the Jackson Heights neighborhood of New York, New York, the United States, on January 27, 2021. REUTERS / Nick Zieminski / File Photo

September 28 (Reuters) – Citadel Securities did not ask Robinhood or any other company to restrict or limit trading on GameStop and other so-called “memes stocks” at the height of the sales frenzy retail in January, the market maker said. Tuesday.

Robinhood and several other brokers restricted trading in GameStop shares on January 28 following a stunning two-week rally led by retail traders that triggered a “short squeeze” resulting in billions of dollars in losses for Wall Street hedge funds.

“Citadel Securities has never asked, implied, accepted or otherwise sought to limit or restrict trading in these securities,” Citadel Securities said in a statement to Reuters on Tuesday.

The trade halt has frustrated retail investors, capped hedge fund losses, and caught the attention of lawmakers and regulators. During a hearing in the U.S. Congress in February, Citadel LLC CEO Ken Griffin, who also founded Citadel Securities, said the hedge fund had not contacted Robinhood about the trade restriction.

Robinhood CEO Vlad Tenev also said at the time: “We do not respond to hedge funds.” The online brokerage did not immediately comment when contacted by Reuters.

“It must frustrate endless conspiracy theorists that Vlad and I never texted, called or met,” Griffin said.

Commission-free brokerages, including Robinhood, have been criticized for their practice called Payment for Order Flow (PFOF), whereby they receive fees from market makers for routing trades to them and fail to charge users. for individual transactions.

This practice is currently under investigation by the United States Securities and Exchange Commission.

Report by Medha Singh in Bengaluru; Editing by Saumyadeb Chakrabarty

Our standards: Thomson Reuters Trust Principles.


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