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Citadel Securities denies involvement in ‘meme stock’ trading restrictions By Reuters


© Reuters.

(Reuters) – Citadel Securities didn’t ask Robinhood (NASDAQ) or other firms to limit or restrict trading on GameStop, NYSE: or other “meme stock” stocks during the peak of retail-driven trades in January. This was according to the market maker on Tuesday.

Robinhood and other brokers stopped trading GameStop shares Jan. 28, following an incredible two-week rally by Wall Street traders. This led to a “short squeeze”, which resulted in billions in losses for Wall Street hedge fund investors.

Citadel Securities released a statement Tuesday to Reuters, saying that Citadel Securities had never asked, intimated, agreed or requested to limit the trading of securities.

This trading halt disappointed retail investors and limited the loss of hedge funds, drawing the attention regulators and legislators. Citadel LLC CEO Ken Griffin (also the founder of Citadel Securities) stated that Robinhood had not been contacted by Citadel LLC about restricting trading at a U.S. Congress hearing.

Vlad Tenev from Robinhood had stated that hedge funds are not his priority. Reuters reached out to the online brokerage but they did not respond immediately.

Griffin stated that “it must frustrate conspiracy theorists no end Vlad and I never texted or called each other.”

Robinhood, a commission-free brokerage that includes Robinhood, has been criticised for its payment for order flow (PFOF) practice. Under this scheme they get fees from the market-makers to route trades and don’t charge customers for each trade.

U.S. Securities and Exchange Commission is investigating the practice.

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