Tag: Citadel Securities (Page 1 of 3)

Chicago Tribune Says Citadel Securities’ Dark Pool Targets Small Investors

Market News: Citadel Securities Dark Pools Exposed
Market News: Citadel Securities Dark Pools exposed

The Chicago Tribune just published a piece explaining exactly what retail investors have been warning the SEC about.

Citadel Securities’ dark pool dominates a big part of the financial world, accounting for as much as half of U.S. stock market activity.

The Chicago Tribune says this prominent dark pool is run by Chicago Billionaire Ken Griffin’s Citadel Securities and has been targeting small scale retail investors.

And they’re not wrong.

Dark pools are typically involved in payment for order flow (PFOF), where they pay broker firms to receive retail order flow.

Brokers such as Robinhood and TD Ameritrade accept payment for order flow.

But retail investors have now brought these nefarious practices in the market to light.

Let’s discuss it.

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Taking down Citadel’s dark pool

Citadel Securities Dark Pool
Citadel Securities Dark Pool

The Chicago Tribune has acknowledged investors’ orders almost never make it to the New York Stock Exchange (NYSE) or NASDAQ.

The editorial team say they get redirected to electronic platforms run by private market makers who match buyers with sellers at a price they determine, behind closed doors.

Citadel Securities’ dark pool is able to make money on the difference between bid and ask prices when trades are matched.

This creates major conflict of interest as the orders they fill are not competing against one another; therefore, the price is open for manipulation.

SEC Chairman Gary Gensler said himself 90% to 95% or retail’s orders do not get processed through the lit exchange.

And although light is shining on this very real problem, nothing is being done about it by our regulators yet.

“The U.S. Securities and Exchange Commission is responsible for revising its rules to keep up with technology and, here’s a surprise, the regulators have fallen behind.” – The Chicago Tribune.

But the editor says the problem is the SEC has too much on their hands and are spreading themselves thin.

They’re focused on crypto regulation, SPACs, and climate control.

It’s rather clear dark pools are not the SEC’s main priority.

Citadel Scandal

Citadel Scandal - Ken Griffin Lied
Ken Griffin – Citadel Scandal

Citadel has been heavily scrutinized by retail investors for not only heavily shorting ‘meme stocks’, but for suppressing the price driven by retail demand with its dark pool.

#KenGriffinLied began trending on Twitter earlier this year and again this month when the U.S. House Committee on Financial Services released a report confirming Robinhood and Citadel did indeed have blunt negotiations prior to trading restrictions on January 28th of 2021.

The “GameStopped” report documents in detail the events that lead to the halting of ‘meme stocks’.

Ken Griffin swore under oath that Citadel and Robinhood had no communication the day prior to the restrictions, but proof has now surfaced.

The question now is, will the case dismissed by Judge Cecilia Altonaga late last year get reopened?

The Miami district court judge admitted the Citadel and Robinhood transcripts were suspicious.

However, the federal court has dismissed the case due to a lack of evidence.

According to Business Insider, the court said that the evidence between Citadel Securities and Robinhood was not sufficient.

The retail community found Judge Cecilia Altonaga had ties to the defendant in the Robinhood and Citadel case, creating a major conflict of interest.

But mainstream media isn’t covering this.

What can be done about this corruption in the market?

Wall Street Corruption

If you’ve been one of my day-ones, you know I’ve always preached raising awareness.

Raising awareness is what gets people to learn, dive deep, and stand against market injustices.

People want to fight for a cause, people want to fight for freedom.

Instead of focusing on the things that are out of our control (SEC, market manipulation, etc.), we must focus on the things that are in our control.

And that is raising awareness to educate the population.

I truly believe this is the way to creating real change.

If this resonates with you, please be sure to give this article a social share.

It all starts with us, one by one, as individuals.

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Who is The DTCC and What Are Their Legal Duties?

Market News: DTCC
Market News: Who is the DTCC?

Retail investors have pulled up some information on the DTCC regarding the blockage of margin calls.

The Reddit community is calling the organization corrupt.

But what exactly is the DTCC and how do they play an important role in our markets?

In this article I’m going to explain the duties of this corporation in simple terms and also touch topic on questions retail investors might have when it comes to AMC and GameStop.

Let’s get started.

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Who is the DTCC?

who is the DTCC?
Depositary Trust and Clearing Corporation

The DTCC (Depositary Trust and Clearing Corporation) is an American post-trade financial services company providing clearing and settlement services to the financial markets.

The DTCC processes trillions of dollars of securities on a daily basis.

As the centralized clearinghouse for various exchanges and equity platforms, the DTCC settles transactions between buyers and sellers of securities.

The information is recorded by its subsidiary, the NSCC.

After the NSCC has processed and recorded a trade, they provide a report to the brokers and financial professionals involved.

This report includes their net securities positions after the trade and the money that is due to be settled between the two parties.

Conflict of interest

Clearing corporations such as the DTCC may receive cash from a buyer and securities or futures contracts from a seller.

The clearing corporation then manages the exchange and collects a fee for this service.

The size of the fee is dependent on the size of the transaction, the level of service required, and the type of security being traded. 

Investors who make several transactions in a day can generate significant fees.

This means every naked share that has been created on the ‘short side’ has been recorded and bypassed by the DTCC/NSCC, all for a fee.

And this is where retail investors begin to question the integrity of the financial market.

One of the DTCC’s bigger partners is Bloomberg LP, a privately held media and software company.

Retail investors are weary about Bloomberg due to having a dark pool where institutions can make unregulated trades.

Bloomberg also happens to be a media platform where Citadel’s Ken Griffin is made to feel at home.

The short seller remains to this date one of the top 10 institutions shorting AMC stock.

Related: Wall Street Journal is Indirectly Owned by Citadel's Ken Griffin

DTCC removing margin calls

There is information going around in the retail community of the DTCC removing margin calls and it’s creating somewhat of fear, uncertainty, and doubt.

After digging around for a while, it’s important to note that the DTCC did indeed remove margin calls, but on January 28th of 2021.

This isn’t necessarily occurring right this moment.

A press released was published advising of the circumstances that occurred during the time ‘meme stocks’ were halted.

The DTCC waived $9.7 billion of collateral deposit requirement on January 28th, 2021, limiting institutional losses and limiting retail profits.

Could the DTCC have been playing the middleman to prevent the market from completely collapsing?

Or was this blatant market manipulation?

The organization allowed several naked shares to flood the market but never stepped in to level the playfield for retail investors.

So why step in to minimize institutional losses?

I think it’s safe to say those client fees really make things happen.

The SEC is by law responsible for regulating the DTCC, but the DTCC is a company who caters to a wide range of institutions in the financial market.

And according to the SEC Chairman Gary Gensler, they need whistleblowers to really tackle the issues at hand.

Is the DTCC corrupt?

Most retail investors openly think so.

The corporation is a business that processes orders between buyers and sellers but caters to financial institutions – not retail investors.

The DTCC along with the NSCC are very well aware of the naked shorting issue in our market.

But they’ve failed to put a halt to it.

One can view this negligence as being complicit.

I’m curious to learn what you think.

Leave your thoughts in the comment section of the blog down below.

Also, be sure to stick around for the latest market news.

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Citadel Pushes Back on Possible SEC PFOF Ban

SEC PFOF Ban
Market News: SEC PFOF Ban threatens corrupt institutions

The SEC is addressing the possibility of banning PFOF (payment for order flow).

Citadel and other institutions are speaking out.

Gary Gensler said there may be a conflict of interest for brokers and that too much power is concentrated in a handful of market makers.

The SEC Chairman could be re-routing retail investors into an automated system that would provide a deep pool of liquidity.

If this goes through, it will be historic.

Let’s discuss it.

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SEC Payment For Order Flow ban

SEC PFOF Ban

Gary Gensler will be speaking on Wednesday in regard to best execution for market orders.

The SEC has been under heavy scrutiny by retail investors as the agency has not made any progress to level the playfield.

The government branch that’s supposed to protect retail investors has even gone as far as taunting investors for buying ‘meme stocks’ recently.

But industry participants have quietly been saying that Gensler will likely use a speech at the Piper Sandler Global Exchange Conference on Wednesday to float several proposals.

These may include best execution and payment for order flow according to CNBC.

Last year during the ‘meme stock’ frenzy, Citadel processed retail’s orders through Robinhood.

Citadel paid Robinhood to give them those orders (PFOF).

However, retail investors don’t want their orders going to Citadel since the market maker/hedge fund/dark pool are short on ‘meme stocks’.

90%-95% of retail’s orders are not processed though the lit exchange.

Citadel takes these orders and trades them at a bargain through foreign exchanges.

Although PFOF is an expense to them, they make a lot more money processing the orders.

If the SEC PFOF ban goes through, orders would not be processed by Virtu or Citadel.

Citadel fights back

A spokesperson for Citadel Securities released the following statement to CNBC:

“It is important to recognize that the current market structure has resulted in tighter spreads, greater transparency, and meaningfully reduced costs for retail investors. We look forward to reviewing the proposals and working with the SEC and the industry towards our longstanding objective of further improving competition and transparency.”

“You need to be very deliberate on that approach,” Ken Bentsen, president and CEO of the Securities Industry and Financial Markets Association (SIFMA) said.

“We have been calling for a review of market structure for some time, but let’s be careful not to try to fix things that may not be broken,” he said. “The retail investor is getting a better deal than they ever have.”

Would you pay small trading fee if it meant Citadel and Virtu no longer reroute your orders to benefit their pockets?

Leave a comment below.

The statement alone that retail is getting a better deal than ever before is such a dishonest thing to spew.

These institutions have been taking retail’s money, using it against them, all while taking no accountability for their actions.

It’s not clear yet whether the SEC PFOF ban will go through or not.

It is certainly something worth discussing though, don’t you think?

Leave your thoughts below.

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More Than 100 Hedge Funds Stranded in Cayman Islands

More than 100 hedge funds stranded in Cayman Islands
More than 100 hedge funds have a collected $6 billion sanctioned in the Cayman Islands

(Bloomberg) Sanctions against Russian Billionaire have left more than 100 hedge funds and private equity firms’ money stranded in the Cayman Islands.

Concord Management has $6 billion at its disposal, most of which pertains to Oligarch Abramovich.

The firm is said to have handed out checks of millions of dollars to more than 100 hedge funds.

Now these hedge funds have a collected amount of $6 billion stranded in the Cayman Islands.

I’ll get to the names of some of the biggest hedge funds below.

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Firms trapped with Russian cash

Bloomberg’s Anna Edwards says sanctions prohibit hedge funds from getting rid of tainted money.

The restrictions also put a hold on the collection of fees.

The Russian-Ukraine war has made it impossible for Russian oligarchs to accept new cash or redeem their stakes.

More than 100 hedge funds are caught up in sanctions trapped with Russian cash according to Bloomberg sources.

Firms with Abramovich’s money can continue to manage it, but what they can’t do is redeem the oligarch’s stake, accept new cash from him or allow him to sell his shares to another investor, according to Cayman Island rules, where many of the funds have offshore entities.

If a firm owns the billionaire money due to the sale of an asset, the proceeds must go into a blocked account.

Firms can also charge fees but cannot collect them until restrictions are lifted.

Millennium Management and other big hedge funds have been affected

Citadel Cayman Islands
Citadel Cayman Islands

Michael Matlin, who founded Concord in 1999, mostly steered money to the biggest and best-known funds.

Over more than two decades, Brevan Howard Asset Management, Millennium Management, Carlyle Group Inc., D.E. Shaw & Co., Sculptor Capital Management Inc. and Apollo Global Management Inc. — as well as smaller firms including Sarissa Capital Management and Ratan Capital Management.

Some of you might recognize Millennium Management from the list of top 10 financial institutions shorting AMC stock.

Sculptor is one of the hedge funds along with Citadel who are facing potential default on Russian bonds.

This SEC report also shows Citadel has funds in the Cayman Islands while this SG 13 form shows the relationship to Concord.

Representatives from the firms declined to comment on the matter.

Russian sanctions cripple Abramovich

Abramovich Chelsea

Abramovich, 55, with a net worth of $13.7 billion according to the Bloomberg Billionaires Index, amassed his fortune from the sale of privatized assets acquired from the former Soviet Union, including oil giant Sibneft and Aeroflot.

He sold his aluminum assets to fellow oligarch Oleg Deripaska, but retains stakes in companies including Russian steelmaker Evraz.

He’s been reinvesting the proceeds in trophy assets for two decades, including purchasing Chelsea Football Club, London properties and private jets.

He’s being forced to sell Chelsea and has moved his superyachts to Turkey out of the reach of European sanctions.

CNN says Citadel’s Ken Griffin is joining the Ricketts family, the owners of Major League Baseball’s Chicago Cubs, in a formal bid for Chelsea Football Club.

Interesting.

I’d love to hear your thoughts in the comment section below.

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BREAKING: Citadel Under Investigation by Department of Justice

DOJ is investigating Citadel
The DOJ is investigating Citadel for market manipulation

Bloomberg just confirmed Citadel is one of the hedge funds under investigation by the Department of Justice.

Regulators are taking Morgan Stanely and several other hedge funds to court after several subpoenas were sent out earlier this year.

Bloomberg’s report confirms Citadel is one of the hedge funds on the list who the DOJ is seeking information from.

Keep reading to watch the Bloomberg clip below.

franknez.com

Welcome to Franknez.com – this clip came about on Twitter where a community member shared the Bloomberg news. Citadel is under investigation by the DOJ and the community is spreading this like wildfire.

Let’s dive right into it!

Bloomberg: Citadel under investigation by DOJ

Citadel under investigation by DOJ Bloomberg

Citadel has been one of the hedge funds/market makers who has been attacking AMC Entertainment stock.

Predatorial short selling strategies were exposed by the AMC and GME stock communities after the ‘meme stock’ frenzy fiasco early last year.

Both these stocks’ share prices have been suppressed by dark pool trading, naked short selling, spoofing, and through OTC trading.

The hedge fund is now being investigated after subpoenas were sent to numerous hedge funds and banks who might be connected.

Morgan Stanley and Goldman Sachs are two of the banks that are being ordered to court.

Among Citadel is a hedge fund by the name of Element according to the Bloomberg report.

Other Citadel news

Citadel News

Citadel received a $1.2 billion lifeline from partners Sequoia and Paradigm early this year, the first time the company receives private funding.

The hedge fund is estimated to have lost several billions of dollars last year shorting AMC and GameStop.

Deputy Global Treasurer Michael Kurlander also resigned last year after 4 years with Citadel.

He left in June of 2021, right when ‘meme stocks’ were at their peak.

The hedge fund announced late last year to its customers they would be imposed heavy fees if they withdrew their investments.

The company also said getting back in would be nearly impossible.

After a year of shorting so called ‘meme stocks’, the community discovered Ken Griffin owns company shares of News Corp., a corporation that owns Wall Street Journal, Market Watch, and a number of other platforms that have been attacking AMC and GameStop.

These mainstream platforms have lost a lot of trust from retail investors due to major conflict of interest.

Other recent probes by the Justice Department

Muddy Waters Hedge Fund Probe
Muddy Waters Hedge Fund Probe – DOJ Investigates Citadel

Muddy Waters was recently probed for flooding the market with fake orders.

Many retail investors doubted the SEC or DOJ would take action, but it seems actions spoke louder than words this time.

Still, only time will tell where these investigations go.

What do you want to see come out of this investigation?

Leave a comment below with your thoughts on the matter.

This is a developing story.

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Read: How do hedge funds manipulate the stock market


Wall Street Journal is Indirectly Owned by Citadel’s Ken Griffin

wall street journal is owned by Ken Griffin

Wall Street Journal just published a piece on the AMC community where the conflict of interest is only so obvious.

They refer to the community as a mob and disrespect AMC’s CEO Adam Aron by saying apes made the CEO “play by their rules.”

WSJ tries to discredit the CEO and portrays the community as an entirely different culture than what it is.

Come to find out, Ken Griffin actually owns Wall Street Journal, well sorta.

Let’s dive right into it.

franknez.com

Welcome to Franknez.com – the blog that fights FUD media. When the community is getting attacked you know we’re doing something right.

Let’s get started!

Now, we can’t be too harsh on the two writers who published this article.

Afterall, they’re just doing their job, right?

Who owns the Wall Street Journal?

The Wall Street Journal is owned by News Corp., a company where Ken Griffin’s Citadel has a stake in.

Who owns Wall Street Journal? Source, Investopedia

News Corp is Wall Street Journal’s parent company.

Not only do they have ownership of the Wall Street Journal, but they also own other DOW Jones assets such as the Dow Jones Newswire.

Other media brands by the DOW Jones include Barrons and MarketWatch, media companies who have been attacking AMC Entertainment all year.

DOW Jones Media Brands
DOW Jones Media Brands

All these finance media platforms are tied and owned by News Corp.

So, where does Ken Griffin come in?

Ken Griffin Owns Almost 1.4 Million Shares of News Corp.

Ken Griffin owns news corp
Ken Griffin owns News Corp, source

CEO of Citadel Securities, Ken Griffin owns News Corp, the company that has ownership over Wall Street Journal, Barrons, MarketWatch, DOW Jones, and other media outlets spewing ill words of AMC Entertainment and its community.

Citadel Securities is on the top 10 list of hedge funds shorting AMC stock.

Anchorage Capital, who was also on that list just closed down after betting against AMC.

The hedge fund had an 18-year run.

There’s a major conflict of interest when the owner of all these companies is using them to pump propaganda to fit a nefarious agenda.

Citadel Securities attempted to bankrupt AMC Entertainment earlier this year but failed after retail investors saved the company.

Because AMC stock has a short squeeze set up, retail investors are not leaving until overleveraged hedge funds have closed their short positions in AMC.

Though the multi-billionaire has the power to influence these companies, the community has the power to expose these untrustworthy media platforms.

And that’s enough to raise awareness.

The Fall of Hedge Funds and FUD Media

Both hedge funds and FUD media platforms face intense scrutiny from investors.

Not only are hedge funds such as Citadel Securities causing financial turmoil for their clients, but financial news platforms are now being exposed as being tied to manipulation tactics.

What can the community do to fight against this manipulation?

It’s simpler than you might think.

By raising awareness.

The more people are educated, the more they will have a clear conscious of what news to consume and what financial path to follow.

These mainstream finance platforms have cost the public so much money.

By scaring them out of their money, they missed the opportunity to secure a position in AMC Entertainment when it traded low.

AMC stock is currently up more than 1300% year-to-date.

Share This News

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Share this news to raise awareness.

Your voice is a weapon against the corruption in our financial system.

And a special thanks to Kat for bringing this information to my attention.

Together, the community will reshape how we invest, with honor and with integrity.

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Read: How do hedge funds manipulate the stock market?

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Why Is Citadel Securities Frightened Of The IEX Exchange?

IEX AMC

The lawsuit regarding the D-Limit order type is taking place on Monday, October 25th. Citadel is suing the SEC arguing that this new order type from the IEX Exchange will harm tens of millions of retail investors, via Reuters.

But will it?

Let’s dive deep into what the IEX Exchange is supposed to do for retail investors, how the D-Limit order will innovate the market, and what it will mean for AMC and GME.

franknez.com

Welcome to Franknez.com – I’ve been doing some more digging and what’s occurring with Citadel and the SEC is a lot bigger than I thought. This is an important time in history.

Let’s get started!

Impact Of IEX Exchange In Markets

IEX Exchange

So, what is the IEX Exchange anyway? IEX, or the “investors exchange” is a fair and transparent stock exchange dedicated to investor and issuer protection.

There are more than 150 broker members using it and around 10,643 unique symbols currently being traded.

The innovation behind the IEX Exchange relies heavily upon it’s D-Limit order type that is supposed to outperform displayed order prices on other exchanges.

This means that predatory strategies such as market arbitrage, where high frequency firms profit from lower prices in foreign exchanges, will no longer be able to do so.

High frequency trading has been used against retail investors to not only gain better prices on stock from other ‘slow loading’ exchanges, but by also using this advantage to sell stock significantly cheaper.

So when you find an exchange that is showing lower prices, hedge funds betting against certain tickers may borrow high in another exchanges while benefiting the difference from selling the stock in those displaying lower prices.

The D-Limit order uses AI technology that provides more consistent and accurate data across all exchanges.

This order type is going to provide high quality prices in the market and is truly innovative and for retail.

How Will The IEX Exchange Affect Citadel Securities?

Citadel

In short, Citadel Securities and other high frequency trading firms will lose a lot of money.

The reason being is they are making money every second from using this high frequency trading technology to their benefit by getting better prices than anyone else in the market.

The IEX Exchange would put Citadel Securities in the same courtyard as retail investors, leveling the playfield.

IEX would create a foundation for a fair market and Citadel Securities is suing the SEC for it.

The use of high frequency trading is not protecting retail investors, on the contrary it’s betting against them and the SEC has recognized this saying, “Citadel enjoys unfair advantages over other participants”.

Fighting against this order type is like getting angry for having to share your cake at your own birthday party.

Citadel processes close to 50% of the entire market’s orders. The company would face massive losses from eliminating high frequency trading alone.

Not to mention, the heavily shorted stock they have been betting against.

What Would IEX Mean For AMC and GME?

AMC GME

We know that high frequency trading gives these firms a trading edge over heavily shorted stock.

They’re able to locate and identify foreign exchanges where the price is significantly lower, and use these means to cheat the system by buying back borrowed shares low; profiting the difference from selling high and driving these stocks down.

IEX would seal these cracks in the system. The D-Limit is meant to keep prices equal and consistent throughout the markets.

This order type will essentially put a halt to high frequency trading, changing the entire game in the markets.

We would have transitioned from an older world of finance, to an innovative one that may bring more participants to the market.

So, How Will This Affect AMC And GameStop?

AMC GameStop

The price moves based on supply and demand would be significantly more accurate.

I would expect massive price moves from retail momentum finally display in the lit market.

IEX is the first step towards a fair market and retail investors must support it’s innovative structure to fight high frequency trading.

Only then could we move on to the checklist of eliminating dark pool trading and other predatory strategies.

What Are The Chances Of The D-Limit Order Type Being Approved?

This would highly depend on the judge(s) looking into this matter. There are a lot of factors that can take place here and Dave Laurer, a former Citadel Securities employee said it well in a recent interview with Trey.

He mentioned you never know what kind of deals are being made behind-the-scenes that may influence certain decisions.

And although Dave Laurer wasn’t very optimistic, I believe the energy we should be feeding is that of positive impact and real change in the markets.

The D-Limit order type would be a significant innovation in our markets and must be upheld.

It would be up to retail investors to fight for justice and a fair market should it not be upheld in court.

This is a developing story so make sure to subscribe to the blog or follow me on social media to get notified on the next updates.

Is The D-Limit Order Type That Good?

To put things into perspective, the IEX Exchange has done numerous tests observing the accuracy of the D-Limit order type.

They’ve found over several tests that not only does the AI match prices but also sets new and higher prices in the market.

The IEX Exchange would give the market a much needed refresh that would allow stocks to perform significantly better than the current model.

IEX Order Displayed Orders Improving
IEX Displayed Orders Improving

This is the closest we’ve come to restructuring the markets and is massively bullish in my opinion.

For our community to be part of this incredible innovation alone is a massive win.

This is what we do. People like us fight for a fair market.

And whether this D-Limit order type goes through or not, this is what we’re going to be known for.

Our community is a beacon for change.

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Citadel Fired Several Portfolio Managers Prior to Investigations

Citadel Fired Surveyor employees
Citadel Fired Surveyor employees

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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Welcome to Franknez.com – if you haven’t already joined the newsletter be sure to do that below. I’m publishing daily market news to keep you informed.

Let’s dive right into it!

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13 of 27 portfolio managers fired from Citadel’s firm

Citadel Surveyor

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.

Read: Citadel loses billions during ‘meme stock’ rallies

Bloomberg announces Citadel is under investigation

Citadel under investigation

Bloomberg announced earlier this year that Citadel was named as one of the hedge funds under investigation by the Justice Department.

You can read more about it here.

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?

Losses in heavily shorted stock cost hedge funds billions of dollars last year

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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Dive into the latest market news on Franknez.com.

Don’t forget to give this article a social share to raise awareness and expose the injustices the retail community has uncovered.

Thank you for being here today, until the next one.

DOJ Launches Criminal Investigation into Short Selling – December 2021 Announcement

Elon Musk: Hedge Funds Tank Stocks Using “Short & Distort”

Elon Musk news on hedge funds, short sellers, and DOJ
Elon Musk news on hedge funds, short sellers, and DOJ

Elon Musk, one of the most influential people and geniuses of our time is speaking out on hedge funds and the SEC.

The Tesla and SpaceX CEO exchanged emails with CNBC on this exclusive take and shares his thoughts on short sellers and regulators alike.

And according to CNBC the SEC declined to comment.

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Welcome to Franknez.com – today’s market news is significant because we have a high-profile influencer speaking out against injustices in the stock market. I’m going to go over big key points from the report.

Let’s dive right into it!

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Elon Musk on hedge funds and short sellers

Elon musk on hedge funds and short sellers

In this CNBC exclusive, Elon Musk says hedge funds have used short selling and complex derivatives to take advantage of retail investors.

Something retail investors who purchased so called ‘meme stocks’ last year found out very easily.

The retail community known as ‘apes’ have been standing up to the injustices brought forth by hedge funds.

Predatorial tactics have suppressed the share prices of AMC and GameStop to further refrain retail from squeezing short sellers from their positions.

The complex derivatives Elon is referring to could be an array of things such as options trading, HFT, swaps, borrowed stock, and even naked shares.

Which in retrospect are all predatorial tactics hedge funds and short sellers use to profit from falling stock prices even when the inflow is largely greater than the outflow.

Tesla CEO speaks out on publicity campaigns that drive stock prices to the ground

The Tesla CEO says hedge funds will short a company, conduct negative publicity campaigns to drive the stock price down, then cash out and do it multiple times over.

This tactic is what’s known as “short and distort”.

Hedge funds use impose their influence on corporate media such as The Fool, Wall Street Journal, and MarketWatch to scare people out of their money.

The Fool - Forget AMC
The Fool – Forget AMC: “Buy this instead”

One of the biggest fear mongers has been The Fool.

They abused their reach to derail curious investors from investing in AMC Entertainment and GameStop stock.

AMC Entertainment was up more than 3,000% at one point and mainstream media caused many investors to miss the opportunity.

And for others, to get in late, resulting in several losses.

The conflict of interest derives from the connection between the hedge fund Citadel and News titan, News Corp.

News Corp owns the Wall Street Journal, DowJones Newswire, MarketWatch, and Barrons.

These are all companies that have put out hit publications attacking AMC and referred to a specific group of activists as ‘conspiracy theorists’.

On the contrary, the retail community is religious about facts and evidence.

Dark pools and naked shorting are only two of many injustices retail investors have brought to light.

The SEC Commissioner confirmed on a Bloomberg exclusive that 90%-95% of retail market orders are not processed through the lit exchange.

Elon on the SEC and regulators

Elon Musk has never been too fond of the SEC.

In 2018 he referred to the agency as the “Shortseller Encrichment Commission”.

In 2020 he posted this statement on Twitter about the SEC.

The CEO made another anti-SEC post on Twitter again after the interview with CNBC.

And retail investors are cheering him on for being a voice against corruption in the market.

The SEC has been held accountable as being implicit to hedge fund market manipulation.

They’ve imposed “fees” that have allowed hedge funds to continue their predatorial strategies.

There has been no serious consequence or justice protecting retail investor.

The agency has also failed to recognize the manipulation in both AMC and GameStop in a report released in December of 2021.

Most retail investors do not trust the SEC according to a poll conducted by community member on Twitter.

The poll below shows that out of 10,511 votes, 97.3% of investors do not trust the agency.

Why are hedge funds being investigated?

why are hedge funds being investigated?
Ken Griffin – Citadel Investigation

Hedge funds are being investigated for flooding the market with fake orders to drive stock prices down, a term known as “spoofing”.

Muddy Waters was recently raided by the FBI for using this predatorial tactic.

Citadel is being investigated too according to a Bloomberg report.

The Department of Justice is involved.

They are targeting several hedge funds and banks in relations to market fraud and manipulation.

Banks involved in the investigations so far are Morgan Stanley and Goldman Sachs.

Bank of America is one of the top 10 financial institutions shorting AMC Entertainment stock.

The bank has yet to be announced in the probe.

Elon Musk told CNBC he’s glad to see the Justice Department is investigating short sellers.

“This is something the SEC should have done, but, curiously, did not.” stated Elon.

He spoke out against short sellers in 2021 during the “meme stock” frenzy.

This was during the time when retail began buying heavily shorted stocks en masse.

Opinion: We need more activists like Musk

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The retail community has done an incredible job at raising awareness of injustices in the market.

The ‘ape’ community without a doubt made today’s progress possible.

Now, retail investors continue to demand regulators to lift short selling suppression imposed on stocks such as AMC and GameStop.

We need more public figures to speak out on the matter.

Would you agree?

Leave a comment below with your thoughts.

Read: AMC Entertainment CEO mocks hedge funds for the second time

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Citadel Pulls $2 Billion From Gabe Plotkin’s Melvin Capital

Citadel pulls $2 billion from sinking hedge fund Melvin Capital
Melvin Capital – Gabe Plotkin – Citadel pulls $2 billion in investments

Citadel just pulled $2 billion from Melvin Capital after the hedge fund has failed to recover from shorting ‘meme stocks’ last year.

Melvin Capital lost $6.8 billion in January of 2021 and has not been able to get out of the trenches since.

Now Citadel is fleeing a sinking ship.

Should this be a warning to short sellers shorting AMC and GameStop?

Let’s find out.

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Welcome to Franknez.com – smart money might not be so smart after all. So called ‘meme stocks’ continue to leave an imprint on Wall Street. Will they be able to get out of this mess?

Let’s dive right into it!

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Citadel loses confidence in Melvin Capital

Ken Griffin's Citadel pulls $2 billion from Melvin Captial
Ken Griffin’s Citadel pulls $2 billion from Gabe Plotkin’s Melvin Capital

Citadel also lost billions last year shorting AMC, so it comes as no surprise their reason to pull back from Gabe Plotkin’s Melvin Capital.

The hedge fund also imposed tight restrictions on its clients leading into the new year.

Citadel’s customers were given an ultimatum to either stay with the hedge fund otherwise coming back would prove to be difficult.

Ken Griffin also received a $1.2 billion lifeline from partners Sequoia and Paradigm in January this year.

This was the first time Citadel had ever received private funding.

With Melvin Capital down another $2 billion it seems it’s only a matter of time before this hedge fund caves into default.

The hedge fund initially held $12.5 billion in AUM.

It lost more than half last year and with Citadel pulling their investment things aren’t looking so good for the short seller.

Hedge funds that closed in 2021

Last year we saw a few hedge funds shut down including, Archegos, Anchorage Captial, and Mudrick.

Anchorage Capital closed after an 18 yearlong streak.

The short seller had 4 million puts of AMC stock before it closed last year.

Do you think Melvin Capital is next?

Leave a comment at the end of the article.

Will hedge funds survive?

Citadel pulled Gabe Plotkin’s Melvin Capital from deep waters in 2021 but now leaves them to sink or swim.

Hedge funds are currently facing deep scrutiny from both retail investors and regulators.

The DOJ is taking Morgan Stanley, Goldman Sachs, and numerous other hedge funds to court.

Citadel is one of the short sellers currently being investigated by the Department of Justice according to a Bloomberg report.

The SEC and DOJ are looking into the following:

  • Communication between banks and hedge funds
  • Proof of ‘Bear Raids’
  • Spoofing
  • And several other market manipulation tactics

Hedge fund Muddy Waters was already raided by the FBI earlier this year for flooding the market with fake orders to drive stock prices down.

Corporate media has been quiet about the incidents since they too may be under investigation for colluding with hedge funds on negative publicity campaigns.

The community has called out mainstream media for deleting articles online on AMC and GameStop.

Would you be surprised if they too came under investigation?

What are regulators doing about hedge funds and short sellers?

what are regulators doing about hedge funds - SEC

The SEC just released a market transparency proposal report outlining rules that will lift suppression on ‘meme stocks’ from short seller manipulation.

Hedge funds betting against AMC and GameStop will fall if these rules are enforced.

Regulators are looking to micromanage short sellers and track their every move when it comes to creating a short sell in the market.

You can read a more in-depth overview of the proposals here.

If these proposals go through, surging share prices will cause ‘meme stocks’ to squeeze shorts from their positions.

The SEC warns short sellers of “short squeeze” risks in the report.

Despite the progress, many retail investors aren’t fully convinced, though more seem to be giving the SEC the benefit of the doubt now.

Whether you believe regulators will take appropriate action or not, you cannot deny hedge funds are in serious trouble.

Citadel bailed out Gabe Plotkin’s Melvin Capital last year but is now taking their investment back to keep afloat.

What do you think is next for hedge funds?

Leave a comment below.

Read: SEC warns hedge funds of “short squeeze” risks in new report

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