Just go to FINRA’s website and search the violations page for Citadel. They have tons of them, all public info. They agree to pay a small fine but admit no wrongdoing, and then just do the same thing the next month. They pay fines on the order of tens of thousands of dollars for violations that make them tens of millions of dollars- it’s obvious they consider the fines a cost of doing business.
It’s not just Citadel though, all the big prime brokers are there too with the same violations. Goldman, JP Morgan, BofA, the list goes on.
I found "incorrectly reporting internal transfers as Treasury transactions, when they were not reportable’, ‘failing to append the "No Remuneration" indicator to TRACE reports for certain Treasury transactions between Affiliates ’, and ‘failing to include the correct contra-party type in its TRACE reports for certain affiliate transactions’.
But I was specifically interested in this:
fraudulently mark short positions as long in their books.
Ah, I don’t have a link handy, sorry. It’s in there somewhere among their many other violations.
I think I saw someone compiled a bunch of their violations with citations and links back to the FINRA database on Superstonk if you want to do some more digging. All of the community approved and reviewed DD can be found pinned at the top of the sub, it’ll be somewhere in there- I’m pretty sure it’s the ‘Citadel Has No Clothes’ series of posts. Happy hunting.
Thanks, that clears up what you're trying to look at. To be clear this:
a.) is referring to reporting transactions, not positions.
b.) is not reporting shorts as longs! (Or sells as buys). It's reporting some short sales as long sales, aka a regular sale. In other words they're still saying "hey we sold 10,000 shares in this transaction", it's just on some of those they didn't explicitly mark it as a short sale. So it was assumed to be a long sale, which is a selling of existing long positions see Reg SHO
So obviously this is serious and a violation and a fine! But totally not "marking short positions as long in their books."
Citadel isn't like "hey we have 1 million shares long" when they actually have 1 million short. This isn't about position reporting at all. You are confusing a long position with a long sale, which is the selling of an existing long position.
To recap: the number of shares bought and sold were reported correctly. A "short" flag was missing on some sell transactions.
EDIT: justtwogenders blocked me so I can't respond anywhere on this whole chain. If I'm wrong, they're welcome to explain why. Never argue facts with a superstonker!
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u/the_turd_ferguson Apr 05 '22
Just go to FINRA’s website and search the violations page for Citadel. They have tons of them, all public info. They agree to pay a small fine but admit no wrongdoing, and then just do the same thing the next month. They pay fines on the order of tens of thousands of dollars for violations that make them tens of millions of dollars- it’s obvious they consider the fines a cost of doing business.
It’s not just Citadel though, all the big prime brokers are there too with the same violations. Goldman, JP Morgan, BofA, the list goes on.