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