Ken Griffin’s Citadel fired several portfolio managers and analysts at its Surveyor Capital unit in October.
According to Bloomberg, more than a half-dozen portfolio managers and even more analysts departed the institution in span of five months starting in May.
Coincidentally, employees began to get fired or relocated from the firm a month prior to AMC’s all-time high runup back in June.
But there’s more, and I’m going to break it down below for you.
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13 of 27 portfolio managers fired from Citadel’s firm
According to Bloomberg, 13 out of 27 portfolio managers who ran their own trading pods were fired from Citadel’s Surveyor unit.
The unit has since hired 10 new portfolio managers.
“Most of the exits were related to performance,” said Zia Ahmed, a spokesperson for the $43 billion firm.
Community, Citadel began to fire its employees prior to AMC’s all-time high runup; they knew something big was coming.
And they continued to fire their managers up until October of last year, moments before investigation announcements occurred.
In 2021, we saw the head of Citadel’s Surveyor Todd Barker resign after 16 years at the hedge fund.
However, the portfolio manager was moved to a different position in the firm meaning he was let go due to the severe losses the hedge fund experienced last year.
Bloomberg announces Citadel is under investigation
Bloomberg announced earlier this year that Citadel was named as one of the hedge funds under investigation by the Justice Department.
But in short, the DOJ is investigating collusion between hedge funds and banks, ‘short and distort’ campaigns, ‘spoofing’, and other forms of market manipulation.
Short sellers have been highly scrutinized by the retail investor community and public figures such as Ryan Cohen, Jon Stewart, and Elon Musk.
Predatorial strategies in the market have allowed short sellers to gain the higher ground for decades now.
And activists from all around the world are saying enough is enough, the retail community has demanded regulators to step up.
Did hedge funds underestimate retail investors?
What do you think?
Hedge funds have gotten burned over the last year betting against plays retail investors are going long on.
AMC and GameStop have been two fantastic examples of how short sellers have been affected by the rallies.
And while mainstream media pumps that ‘meme investors’ have dispersed, will that wishful thinking lead to underestimating retail a second time?
Leave a comment below with your thoughts.
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