FINRA Fines Citadel Securities For Trading Violations


The Financial Industry Regulatory Authority (FINRA) recently fined $700,000 for alleging that Citadel Securities LLC did not comply with FINRA rules.

20 July, 2020 | AtoZ Markets – Citadel Securities LLC operates as a fixed income and equity products market-making company. It also offers liquidity to various types of institutional investors, including asset managers, banks, broker-dealers, government agencies, hedge funds, and public pension programs. It joined FINRA in February 2005. The company has six branches and approximately 380 registrants.

Finra Accuses Citadel Securities of Trading Ahead of Customer Orders

Citadel Securities LLC has agreed to pay $700,000 fine to FINRA over allegations that it violated FINRA rules that protect customer orders, promote market transparency, and encourage quote competition. Citadel Securities did not accept or deny the accusations but agreed to pay restitution and fine.

Regulators accused Citadel Securities of having executed orders below the price at which the company traded in their accounts. The market-making company also did not consistently apply the documented methodology to certain OTC customer orders. FINRA said:

“The OTC Desk, however, implemented controls, settings and processes that removed hundreds of thousands of mostly larger customer orders from those logics. While those controls, settings and processes had multiple purposes, they shared a principal purpose of directing OTC customer orders for manual review and/or handling. Impacted orders were rendered inactive until the completion of a manual trader review”.

In November 2011, Citadel Securities established an OTC trading desk. At least between September 2012 and mid-September 2014, OTC desks traded ahead of inactive OTC customer orders, according to regulators. FINRA said:

“In addition, from at least October 2012 to September 2018, the OTC Desk failed to display certain customer limit orders as required by FINRA Rule because of other systems and programming logic”.

Citadel Securities LLC

  • CRD No: 116797
  • Office Location: 131 South Dearborn Street 32nd Floor Chicago, IL 60603
  • Phone: 312-395-2100

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