Tag: Citadel News (Page 1 of 5)

Hedge Funds Will Now Disclose Which Companies They Short

Hedge funds will now disclose which companies they sell short to the Securities and Exchange Commission (SEC), reports the WSJ.

“Traders will get a broader look at which public companies are being targeted by short sellers under rules the Securities and Exchange Commission adopted Friday as part of its response to the 2021 GameStop trading frenzy.

In a short sale, a trader bets against a stock by borrowing shares and then selling them in hopes the shares’ price will decline before the trader must return them to the lender.

In the case of GameStop, individual investors sought to create a “short squeeze” by forcing short sellers to buy stock to cover their positions, boosting share prices.”

SEC commissioners voted 3-2 on Friday to adopt two rules—one aimed at large short sellers, and the other at lenders of securities. 

“These are two opaque areas of the market, short selling and securities lending,” Gensler said.

The SEC Chair says that the changes should promote greater transparency and efficiency in the market.

Republican SEC Commissioner Mark Uyeda said the changes could discourage short selling and, therefore, curb the market’s ability to appropriately price assets.

“The final rule places burdensome and costly reporting requirements on investment managers instead of adjusting, consolidating, and leveraging data already collected,” said Bryan Corbett, president of the Managed Funds Association, a group of hedge funds.

Ken Griffin’s Citadel Securities is now suing the SEC over its new market transparency rules meant to keep institutions under tighter surveillance.

The hedge fund was recently fined $7 million for marking short sales as long for five years.

“Compliance with the order marking requirements of Reg SHO is a key component of regulatory efforts to curtail abusive market practices, including ‘naked’ short selling,” says Mark Cave, Associate Director of the SEC’s Division of Enforcement.

Other SEC News Today

Market News Today - Hedge Funds Will Now Disclose Which Companies They Short.
Market News Today – Hedge Funds Will Now Disclose Which Companies They Short.

SEC Commissioner Jaime Lizarraga said on Friday that securities lending facilitates illegal trading.

The official SEC statement comes after regulators have been expected to adopt new market transparency rules that will shed light on short sellers and other market participants.

“As with securities lending, short sales, provided they are conducted in compliance with applicable rules, can play a valuable price discovery role in our capital markets.

That said, they can sometimes contribute to, or even cause, precipitous price declines, facilitate market manipulation, and generate market uncertainty and volatility”said Commissioner Lizarraga.

“To minimize the gap between these benefits and downsides, the Commission’s action today strikes the appropriate balance between increased transparency for investors and regulators of short sale-related data, and concerns about real-time disclosure of trading strategies.

Currently, Regulation SHO is the primary rule governing short sales of equities.

Although this rule imposes some recordkeeping obligations on broker-dealers, it does not require market participants to track whether short-sellers cover their short sales or report bona fide market-making information on a regular basis.

Today’s rule will shine a light on short sale activity by institutional investment managers.

It fills gaps in the data these managers currently report about their monthly and daily short sale activities.

This data is essential for the Commission to assess and monitor risks related to large short positions, for reconstructing market events, and for deterring fraud, manipulation, and other potential market abuses.

Today, investing communities have raised concerns of market manipulation in stocks such as AMC EntertainmentMeta MaterialsFingerMotionGlobal Tech Industries, Mullen Automotive, and many more.

Stock manipulation from short sellers, primarily hedge funds, is a topic that main street has been urging our regulators to tackle head on.

Also Read: SEC’s Director of Enforcement Now Under Investigation for Corruption

Market News Published Daily 📰

Market News Today - Hedge Funds Will Now Disclose Which Companies They Short.
Market News Today – Hedge Funds Will Now Disclose Which Companies They Short.

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Citadel Is Now Suing The SEC Over New Transparency Rules

Ken Griffin’s Citadel Securities is now suing the SEC over its new market transparency rules meant to keep institutions under tighter surveillance.

Citadel Securities and the American Securities Association, a trade group, announced on Tuesday that they are suing Wall Street’s top regulator over new rules on the funding of a comprehensive market data surveillance system.

The litigation, brought before the U.S. Court of Appeals for the 11th Circuit in Atlanta, escalates the investment industry’s battle with the U.S. Securities and Exchange Commission over the so-called Consolidated Audit Trail (CAT),” reports Reuters.

The ASA says that the SEC has “overstepped its statutory authority” and “failed to address investor and industry concerns” leaving them with no choice but to litigate.

“The Commission undertakes its regulatory responsibilities consistent with its authorities,” an SEC spokesperson said.

“The CAT is a repository of investor and transaction data meant to give regulators all-encompassing insight into U.S. market transactions.

The SEC mandated the CAT’s creation in 2012 as a response to the “flash crash” two years earlier, when a sudden plunge on major Wall Street indices temporarily erased nearly $1 trillion in market value.

Republican officials and industry representatives have said the system presents cybersecurity and privacy risks and is likely to pass undue costs on to investors.”

Citadel was recently fined $7 million in penalties for naked short selling.

The Securities and Exchange Commission says the market maker violated a provision of Regulation SHO, the regulatory framework designed to address abusive short selling practices, which requires broker-dealers to mark sale orders as long, short, or short exempt.

“Compliance with the order marking requirements of Reg SHO is a key component of regulatory efforts to curtail abusive market practices, including ‘naked’ short selling,” said Mark Cave, Associate Director of the SEC’s Division of Enforcement.

SEC Commissioner Now Says Securities Lending Facilitates Illegal Trading

Market News Today - Citadel Is Now Suing The SEC Over New Transparency Rules.
Market News Today – Citadel Is Now Suing The SEC Over New Transparency Rules.

SEC Commissioner Jaime Lizarraga said on Friday that securities lending facilitates illegal trading.

The official SEC statement comes after regulators have been expected to adopt new market transparency rules that will shed light on short sellers and other market participants.

“As with securities lending, short sales, provided they are conducted in compliance with applicable rules, can play a valuable price discovery role in our capital markets.

That said, they can sometimes contribute to, or even cause, precipitous price declines, facilitate market manipulation, and generate market uncertainty and volatility”said Commissioner Lizarraga.

“To minimize the gap between these benefits and downsides, the Commission’s action today strikes the appropriate balance between increased transparency for investors and regulators of short sale-related data, and concerns about real-time disclosure of trading strategies.

Currently, Regulation SHO is the primary rule governing short sales of equities.

Although this rule imposes some recordkeeping obligations on broker-dealers, it does not require market participants to track whether short-sellers cover their short sales or report bona fide market-making information on a regular basis.

Today’s rule will shine a light on short sale activity by institutional investment managers.

It fills gaps in the data these managers currently report about their monthly and daily short sale activities.

This data is essential for the Commission to assess and monitor risks related to large short positions, for reconstructing market events, and for deterring fraud, manipulation, and other potential market abuses.

Today, investing communities have raised concerns of market manipulation in stocks such as AMC EntertainmentMeta MaterialsFingerMotionGlobal Tech Industries, Mullen Automotive, and many more.

Stock manipulation from short sellers, primarily hedge funds, is a topic that main street has been urging our regulators to tackle head on.

Also Read: SEC’s Director of Enforcement Now Under Investigation for Corruption

Market News Published Daily 📰

Market News Today - Citadel Is Now Suing The SEC Over New Transparency Rules.
Market News Today – Citadel Is Now Suing The SEC Over New Transparency Rules.

Don’t forget to opt-in for push notifications so you don’t miss a single article!

Also, thank you to all of our blog sponsors. This year we’ve been able to increase push notifications slots making it more convenient than ever for new readers to receive their daily market news and updates.

You can also follow me on TwitterInstagramFacebook, or LinkedIn for daily news and updates on your favorite stories.


Become a Sponsor for only $1/mo.

  • Gain access to EXCLUSIVE FrankNez articles you won’t find here.
  • Become part of a private and safe Discord community, just for retail investors.
  • Get drawn at the end of the year for holiday giveaways.


SEC Commissioner Now Says Securities Lending Facilitates Illegal Trading

SEC Commissioner Jaime Lizarraga said on Friday that securities lending facilitates illegal trading.

The official SEC statement comes after regulators have been expected to adopt new market transparency rules that will shed light on short sellers and other market participants.

“As with securities lending, short sales, provided they are conducted in compliance with applicable rules, can play a valuable price discovery role in our capital markets.

That said, they can sometimes contribute to, or even cause, precipitous price declines, facilitate market manipulation, and generate market uncertainty and volatility”, said Commissioner Lizarraga.

“To minimize the gap between these benefits and downsides, the Commission’s action today strikes the appropriate balance between increased transparency for investors and regulators of short sale-related data, and concerns about real-time disclosure of trading strategies.

Currently, Regulation SHO is the primary rule governing short sales of equities.

Although this rule imposes some recordkeeping obligations on broker-dealers, it does not require market participants to track whether short-sellers cover their short sales or report bona fide market-making information on a regular basis.

Today’s rule will shine a light on short sale activity by institutional investment managers.

It fills gaps in the data these managers currently report about their monthly and daily short sale activities.

This data is essential for the Commission to assess and monitor risks related to large short positions, for reconstructing market events, and for deterring fraud, manipulation, and other potential market abuses.

Today, investing communities have raised concerns of market manipulation in stocks such as AMC Entertainment, Meta Materials, FingerMotion, Global Tech Industries, Mullen Automotive, and many more.

Stock manipulation from short sellers, primarily hedge funds, is a topic that main street has been urging our regulators to tackle head on.

Also Read: SEC’s Director of Enforcement Now Under Investigation for Corruption

Other Market News Today

Market News Today - SEC Commissioner Now Says Securities Lending Facilitates Illegal Trading.
Market News Today – SEC Commissioner Now Says Securities Lending Facilitates Illegal Trading.

For five years Citadel incorrectly marked short sales as long sales and vice versa according to the SEC’s latest report.

Retail investors have created an uproar on social media for two primary reasons.

  1. Citadel was only fined $7 million — which investors allege is merely a ‘pay to play’ fine.
  2. Citadel’s naked short selling “conspiracies” ended not being conspiracies, despite Bloomberg and WSJ journalists idolizing Citadel’s Ken Griffin.

For years now, retail investors have raised concerns over Citadel’s hedge fund and market making power, claiming there is simply too much conflicts of interest.

The Securities and Exchange Commission says the market maker violated a provision of Regulation SHO, the regulatory framework designed to address abusive short selling practices, which requires broker-dealers to mark sale orders as long, short, or short exempt.

According to the SEC’s order, for a five-year period, it is estimated that Citadel Securities incorrectly marked millions of orders, inaccurately denoting that certain short sales were long sales and vice versa.

“Compliance with the order marking requirements of Reg SHO is a key component of regulatory efforts to curtail abusive market practices, including ‘naked’ short selling,” said Mark Cave, Associate Director of the SEC’s Division of Enforcement.

“This action against Citadel Securities demonstrates that a broker-dealer’s failure to comply with the requirements of Reg SHO can have negative downstream consequences on the accuracy of the firm’s electronic records, including its electronic blue sheet reporting, depriving the Commission of important information about the markets it regulates.”

Investors on social media say Citadel’s punishment is miniscule compared to the institutions massive gains it claims to have made, especially in the past years.

Keep in mind, Madoff never lost either.

Also Read: Judge Now Finds Broker-Dealers May Be Liable for Illegal Trading

Market News Published Daily 📰

Market News Today - SEC Commissioner Now Says Securities Lending Facilitates Illegal Trading.
Market News Today – SEC Commissioner Now Says Securities Lending Facilitates Illegal Trading.

Don’t forget to opt-in for push notifications so you don’t miss a single article!

Also, thank you to all of our blog sponsors. This year we’ve been able to increase push notifications slots making it more convenient than ever for new readers to receive their daily market news and updates.

You can also follow me on TwitterInstagramFacebook, or LinkedIn for daily news and updates on your favorite stories.


Become a Sponsor for only $1/mo.

  • Gain access to EXCLUSIVE FrankNez articles you won’t find here.
  • Become part of a private and safe Discord community, just for retail investors.
  • Get drawn at the end of the year for holiday giveaways.


New Market Transparency Rules Will Shed Light on Short Sellers

New market transparency rules will shed light on short sellers and other market participants according Financial Times.

These rules are expected to be adopted by US regulators this week as part of a “broad regulatory push for greater market transparency.”

“Investors, typically hedge funds wagering that securities will fall in value — known as short selling — need to borrow stocks and bonds to make the bets before returning them to their owners.

Lenders of the securities profit by charging a fee for the borrowed assets.

Some $1.8tn of securities are loaned annually in the US, according to data cited by insurance regulators.

The US Securities and Exchange Commission on Friday is scheduled to vote on whether to push ahead with its disclosure rule.

As first aired in November 2021, the proposal would require securities lenders to report each loan within 15 minutes of the deal.

Information on the loans, but not the names of the parties involved, would be made public.”

What’s prompted these rules today has been primarily due to the aftermath of the 2008 financial crisis – a time when Wall Street celebrated with champagne as an angry public marched the streets of New York.

“Making the securities lending markets more transparent will make them more efficient, and that’s not great news for some banks’ business models,” said Tyler Gellasch, chief executive of the Healthy Markets Association.

The Investment Company Institute, which represents the funds that do most of the securities lending, has warned that the 15-minute reporting requirements will layer on costs and make the practice unprofitable.

They also warn rapid disclosures could make it easier for high-frequency traders to front-run investors, reports FT.

Also Read: SEC’s Director of Enforcement Now Under Investigation for Corruption

Other SEC News Today

Market News Today - New Market Transparency Rules Will Shed Light on Short Sellers.
Market News Today – New Market Transparency Rules Will Shed Light on Short Sellers.

The SEC has now charged Citadel Securities for illegal short selling violations according to an SEC filing published in late September.

The Securities and Exchange Commission says the market maker violated a provision of Regulation SHO, the regulatory framework designed to address abusive short selling practices, which requires broker-dealers to mark sale orders as long, short, or short exempt.

To settle the SEC’s charges, Miami-based Citadel Securities agreed to pay a $7 million penalty.

$7 million is merely a slap on the wrist to the market maker giant.

The gains Citadel collected over the years trump the SEC’s fine — retail investors allege it’s simply the ‘cost of doing business’.

According to the SEC’s order, for a five-year period, it is estimated that Citadel Securities incorrectly marked millions of orders, inaccurately denoting that certain short sales were long sales and vice versa.

The SEC’s order finds that the inaccurate marks resulted from a coding error in Citadel Securities’ automated trading system and that the firm provided the inaccurate data to regulators, including the SEC during this period.

“Compliance with the order marking requirements of Reg SHO is a key component of regulatory efforts to curtail abusive market practices, including ‘naked’ short selling,” said Mark Cave, Associate Director of the SEC’s Division of Enforcement.

“This action against Citadel Securities demonstrates that a broker-dealer’s failure to comply with the requirements of Reg SHO can have negative downstream consequences on the accuracy of the firm’s electronic records, including its electronic blue sheet reporting, depriving the Commission of important information about the markets it regulates.”

Related: For Five Years Citadel Marked Short Sales As Long

Market News Published Daily 📰

Market News Today - New Market Transparency Rules Will Shed Light on Short Sellers.
Market News Today – New Market Transparency Rules Will Shed Light on Short Sellers.

Don’t forget to opt-in for push notifications so you don’t miss a single article!

Also, thank you to all of our blog sponsors. This year we’ve been able to increase push notifications slots making it more convenient than ever for new readers to receive their daily market news and updates.

You can also follow me on TwitterInstagramFacebook, or LinkedIn for daily news and updates on your favorite stories.


Become a Sponsor for only $1/mo.

  • Gain access to EXCLUSIVE FrankNez articles you won’t find here.
  • Become part of a private and safe Discord community, just for retail investors.
  • Get drawn at the end of the year for holiday giveaways.


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