Tag: Hedge Funds (Page 2 of 15)

Hedge Funds Lost $208 Billion in 2022 for Clients

How much money did hedge funds lose last year
Market News: Hedge Fund losses in 2022.

(Reuters) In 2022, when fears of rising interest rates and geopolitical uncertainty weighed on markets, investment firms that focused on trading strategies and bet on macroeconomic trends reaped gains.

Those with strategies linked to market moves stumbled.

Last year will mostly be remembered as a tough one, with the broader S&P 500 (.SPX) index losing 20% and blue chip hedge fund managers like Tiger Global and Third Point nursing losses.

Tiger Global was on the brink of collapsing all last year as it struggled to stay afloat.

Overall, hedge funds lost $208 billion in 2022 for clients, marking the biggest single-year decline since 2008, when they lost $565 billion, LCH data showed.

Hedge funds, which were jointly managing $3.3 trillion on Dec. 31, 2022, according to eVestment data, often promise to outperform, especially when markets are stumbling.

And according to WSJ, short sellers were down $81 billion by the end of January this new year after stocks rallied.

Goldman says bigger short squeezes are coming since the ‘meme stock’ frenzy.

Still, the direction of the market in 2023 is uncertain as recession talks loom.

Few Hedge Funds Survived 2022

Hedge Fund Losses 2022 - Citadel Securities Ken Griffin thanks Redditors.
Hedge Fund Losses 2022 – Citadel Securities Ken Griffin thanks Redditors.

The 20 best performing hedge fund managers earned $22.4 billion for investors in 2022, marking their slimmest gains since 2016 as many firms, including Tiger Global Management, struggled with slumping financial markets, LCH Investments data show.

Citadel’s gain of $16 billion last year was the largest annual gain ever made by a hedge fund manager, LCH said.

The top 20 managers, led by Ken Griffin’s Citadel, Bridgewater Associates and D.E. Shaw Group, made less than half of the $65.4 billion the group returned in 2021 when rising stock prices led to a record return.

In comparison, they made $63.5 billion in 2020 and $59.3 billion in 2019.

“Redditors, thank you so much for helping create the best pipeline we’ve ever had”, said Ken Griffin on Business Insider.

Ken Griffin, on how the GameStop frenzy helped raise Citadel’s profile with potential hires.

The GameStop affair, in an odd twist, actually helped boost Citadel’s clout with potential recruits, Griffin said.

“For a lot of people this was a wake-up call that this firm Citadel is actually one of the most important players in the world’s financial markets,” he told Business Insider.

“Redditors, thank you so much for helping create the best pipeline we’ve ever had.”

Citadel Securities had to receive a $1.2 billion lifeline from partners Sequoia and Paradigm in the beginning of 2022.

In March, the hedge fund froze customers from being able to withdraw their money.

Read: Disney Lays Off 7,000 as Streaming Services Tank

Market News Published Daily

Market News Today - Hedge Fund losses 2022 report.
Market News Today – Hedge Fund losses 2022 report.

For more stock market, business news and updates, join the newsletter to receive weekly market news and notifications straight to your inbox.

Franknez.com is the media blog that keeps retail investors informed.

You can also follow me on TwitterInstagramFacebook, or LinkedIn for daily posts.


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How Do Hedge Funds Manipulate The Stock Market?

how do hedge funds manipulate the stock market.
Market News: How hedge funds manipulate the stock market.

Hedge funds have been manipulating the stock market for decades.

But it wasn’t until now that a community has risen to raise awareness of market injustices.

The shorting of both AMC and GameStop stock have uncovered a number of nefarious strategies used against retail investors.

What is the SEC doing to regulate these financial entities?

We’re here to find out.

Franknez.com

Let’s get started!

Overleveraging Borrowed Shares

Hedge funds have an incredible supply of short shares available to borrow.

This advantage has allowed them to manipulate a stock’s share price by initiating short-ladder attacks.

While supply and demand are pushing a stock’s price up, hedge funds short the stock using an insane amount of leverage.

This predatorial strategy has yet to be announced as illegal nor has it been addressed by the SEC.

Off Exchange Trading

Hedge funds and market makers are getting away with being able to trade and swap stock in foreign exchanges where the stock’s price isn’t required to be disclosed.

They’re taking retail orders and, in a way, manipulating the circulating supply by not reporting accurate transactions.

We’ve seen this happen with Barclays.

Stock market manipulation
Barclays CEO, Jes Staley – Hedge fund manipulation

Reports by Finra have been made public detailing multiple fines on Barclays for inaccurate books and records.

Barclays is one of Citadel’s clearing houses.

Off exchange trading where transactions aren’t displayed on the list market such as the NYSE is a massive problem the SEC is still trying to figure out.

Though the SEC is trying to implement the D-Limit order that will allow stocks to trade under IEX, they’re having trouble from hedge funds and market makers.

Citadel has sued the SEC on this matter, we have yet to receive a public update on the case.

Related: 95% of Retail Orders Don’t Go Through the Lit Exchange

Naked Shorting

AMC and GameStop have had an incredible amount of FTDs, or failure-to-delivers.

These are orders that have not been executed in options, and are usually a result of a ‘short party’ not owning or not having all of the underlying asset.

This has led retail investors to the educated assessment that synthetic shares are floating in the market; shares known as naked shares used to short a stock.

According to Investopedia, “Despite being made illegal after the 2008–09 financial crisis, naked shorting continues to happen because of loopholes in rules and discrepancies between paper and electronic trading systems.”

Naked shorting has gone mainstream with CNBC’s Melissa Lee and Fox Business’s Charles Payne bringing light to this predatorial practice in the market.

Retail investors must use their voice to address these issues to the SEC.

Related: GTII Pursues Legal Action Against Naked Shorts

The Use of Mainstream Media Outlets

According to The Fool, you should invest in this or that “instead”.

We’ve seen the headlines countless times.

The Motley Fool is a source that provides its subscribers with hand-picked stocks with potential gains.

With tremendous respect, stick to what you do.

The integrity of this company is to help investors pick winning stocks, not to divert them from a stock due to its potential upside that can cause hedge fund partners to lose billions of dollars.

And that’s exactly what happened.

No matter how many times mainstream media outlets tried to divert retail investors from buying AMC stock, it cost hedge funds a lot of money all year.

And at the same time, a lot of retail investors have a lot of unrealized gains.

This ladies and gentlemen is how the media has tried to manipulate the performance of a stock.

This influence can sway a new retail investor from adding to the surging volume of shares being purchased in the market.

To the new retail investor – make your financial decisions based on your own due diligence.

Not on what media sources get paid to write about.

Yahoo Finance & InvestorPlace

Platforms such as Yahoo Finance & InvestorPlace have also had their fair share of negative headlines to try and divert the public from skyrocketing AMC to the moon.

With InvestorPlace even throwing a jab at GME investors saying, “If You’ve Made Money On GameStop, You’re Not An Investing Genius”.

Perhaps not, but I’m pretty certain these investors are wealthier than the person who came up with that punchline.

These media sources have been discouraging new retail investors from investing in AMC since the beginning of the year although the stock is up year-to-date!

Manipulation In the Stock Market

robinhood stock market manipulation
Robing Hood? Stock market manipulation

I’m sure you’ve all heard of the Robinhood scandal.

This is another form of manipulation in the stock market caused by the halt of buying power.

Robinhood prevented its users from buying stocks such as AMC and GME (GameStop) during GME’s bull run.

Although restrictions aren’t as tight anymore, we’re beginning to see trusted and beloved companies get exposed as hedge funds worst nightmares become a reality.

Today we’re seeing more people learn about how the stock market moves.

If more of the public is to understand how hedge funds pose a risk to our economy and businesses, we must expose these financial institutions for who they really are.

Read: Why new retail investors investing in AMC should avoid Robinhood

A House of Cards, r/superstonks (Reddit Post)

A Redditor just posted an insane amount of DD on Reddit.

This long form post discusses the transition from paper filled orders in the stock market to the use of computers going tracing back to the mid 80s.

The post reveals the beginning of issuing naked shares.

We’re also learning that a lot of transaction are being held by the actual institutions that are shorting these stocks.

Robinhood routes more than half of it’s customers to Citadel.

This information has now been disclosed via the Washington Post.

You can read the full Reddit post here.

Trey’s Trades does a quick breakdown on this DD as well.

The video is embedded for your viewing pleasure.

It costs retail investors nothing to hold, but it costs shorts and hedge funds money every day.

It’s only a matter of time before a squeeze occurs, no matter how manipulated the stock market gets.

Related: Citadel loses billions: Hedge funds are getting dragged down

Franknez.com fights The Fool, Yahoo Finance, and InvestorPlace

franknez.com

Franknez.com is fighting for the community against malpractice from all news media shunning AMC, GameStop, and other retail favorites.

This platform will serve as a positive media outlet for the community and only spread factual documentation, and news related cited-sources.

I will not encourage retail investors to take a position in any stock.

However, I will outline the facts and evidence to help you make your own personal financial decision.

How can retail investors bring awareness to the community?

Retail investors can expose false information on social media to shine light on manipulation tactics driven by hedge fund partners.

Sharing factual and positive articles relating to the performance or analytics of a particular stock is another way the investing community can stay united.

Franknez.com is a platform for the community.

Market News Published Daily

For more stock market, business news and updates, join the newsletter to receive weekly market news and notifications straight to your inbox.

Franknez.com is the media blog that keeps retail investors informed.

You can also follow me on TwitterInstagramFacebook, or LinkedIn for daily posts.


Franknez.com

You can now read exclusive FrankNez articles 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.


How Bloomberg’s Beloved Citadel Securities Manipulates the Market

Market News: Here's how Bloomberg's beloved Citadel Securities manipulates the stock market.
Market News: Here’s how Bloomberg’s beloved Citadel Securities manipulates the stock market.

Citadel Securities is a leading financial institution known for its expertise in electronic trading and market making.

However, the company has also been embroiled in controversy surrounding allegations of manipulation in the markets.

In this article, we will explore the history of Citadel Securities and the accusations of market manipulation that have been levied against the company.

We will also examine the potential consequences of such behavior, both for Citadel Securities and for the broader financial industry.

Stay on top of the latest news and trends in the world of finance with our newsletter.

We are providing analysis on the biggest stories in the industry, so you can stay informed and make smart decisions for your finances.

Sign up now and stay ahead of the game.

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How Does Citadel Securities Manipulate the Stock Market?

How does Citadel Securities manipulate the stock market?
How does Citadel Securities manipulate the stock market?

Citadel LLC was founded in 1990 while Citadel Securities was founded in 2002 by Ken Griffin.

Citadel Securities is a leading global market maker that provides liquidity to financial markets.

The company is known for its use of advanced technology and quantitative strategies to facilitate price discovery and drive market efficiency.

However, Citadel Securities has also been accused of manipulating financial markets in order to gain an unfair advantage.

Here are 5 ways Citadel Securities manipulates the stock market.

#1. High Frequency Trading (HFT)

One example of Citadel Securities’ alleged market manipulation is its use of high-frequency trading (HFT) algorithms.

HFT algorithms are designed to execute trades at extremely high speeds, often in fractions of a second.

This allows Citadel Securities to react to market movements faster than other traders and potentially gain an unfair advantage.

Critics argue that the use of HFT algorithms allows Citadel Securities to manipulate prices by quickly buying or selling large volumes of securities, which can create artificial demand or supply and move prices in their favor.

#2. Dark Pools

Another area where Citadel Securities has faced accusations of manipulation is in the realm of dark pools.

Dark pools are private stock exchanges that allow traders to buy and sell securities without revealing their identities or the details of their trades.

This can create a lack of transparency, making it difficult for regulators to monitor market activity and prevent manipulation.

Citadel Securities operates a number of dark pools and has been accused of using these platforms to engage in insider trading and other forms of market manipulation.

In addition to its use of HFT algorithms and dark pools, Citadel Securities has also been criticized for its role in the flash crash of 2010.

On May 6, 2010, the Dow Jones Industrial Average plunged nearly 1,000 points in a matter of minutes, before quickly recovering.

The cause of the flash crash was traced to a large sell order that was executed by Citadel Securities, which many believe was done intentionally to trigger a market panic.

Critics argue that Citadel Securities exploited the vulnerabilities of the market in order to profit from the flash crash.

#3. Spoofing

Another tactic that Citadel has been accused of using is spoofing, which involves placing a large number of fake orders in the market with the intention of tricking other traders into thinking there is more demand or supply than there actually is.

This can cause prices to move in the desired direction, allowing Citadel to profit from the manipulation.

In 2015, Citadel was one of several firms that were fined by the U.S. Commodity Futures Trading Commission for engaging in spoofing.

In December of 2022, a Biotech company researching cancer has decided to sue Citadel Securities for spoofing their stock.

#4. “Front Running”

Citadel has also been accused of engaging in “front-running” – a practice in which traders use inside information to gain an unfair advantage in the market.

In 2013, the company was sued by the New York Attorney General for front-running, but the case was later settled out of court.

Despite these controversies, Citadel remains a major player in the financial world.

Its use of algorithms and high-frequency trading has made it incredibly successful, but it has also raised concerns about the potential for market manipulation.

One of the key reasons for Citadel’s success is its ability to manipulate the markets to its advantage.

This is done through a variety of strategies, including high-frequency trading, where the firm uses powerful computer algorithms to make trades at incredibly fast speeds.

This allows Citadel to take advantage of even the slightest market movements and make a profit.

Related: Biotech Company Suing Citadel Over Market Manipulation

#5. Derivatives

Another way in which Citadel manipulates the markets is through the use of complex financial instruments known as derivatives.

These are financial contracts that derive their value from an underlying asset, such as a stock or a bond.

Citadel uses derivatives to speculate on the future value of these assets, and to hedge against potential losses.

This allows the firm to make huge profits even in volatile market conditions.

Despite its impressive track record and reputation, Citadel Securities has faced allegations of manipulation in recent years.

In particular, the company has been accused of using its dominant market position to manipulate prices and engage in other forms of misconduct.

These allegations have led to significant scrutiny from regulators, authorities, but primarily by retail investors who are concerned about the impact of such practices on the integrity of financial markets.

Related: Here’s How FINRA Has Failed Retail Investors

Leave your thoughts below

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Market News Published Daily

For more stock market, business news and updates, join the newsletter to receive weekly market news and notifications straight to your inbox.

Franknez.com is the media blog that keeps retail investors informed.

You can also follow me on TwitterInstagramFacebook, or LinkedIn for daily posts.


Here’s How FINRA Has Failed Retail Investors

FINRA has failed retail investors
Market News: How FINRA has failed the retail investor community.

FINRA, or the Financial Industry Regulatory Authority, is a non-governmental organization that oversees the securities industry in the United States.

It is responsible for regulating broker-dealers, issuing and enforcing rules for the industry, and protecting investors from fraud and other unethical practices.

While FINRA plays a crucial role in ensuring the integrity of the financial markets, it has been criticized for its handling of certain cases and its failure to adequately protect investors.

One of the main criticisms of FINRA is its arbitration process, which is often used to resolve disputes between investors and broker-dealers.

Critics argue that the arbitration process is biased in favor of the broker-dealers and does not provide investors with a fair and impartial hearing.

Here’s the latest market news.

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Ways FINRA Has Been Complicit

How FINRA has been part of the problem.
How FINRA has been part of the problem | FINRA fraud – Franknez.com.

Investors have reported that they were not allowed to present certain evidence or witnesses during arbitration, and that the arbitrators were not neutral and impartial.

Additionally, the arbitration process is often confidential, which means that investors are unable to share their experiences or warn others about potential issues.

Another criticism of FINRA is its failure to adequately police the securities industry and to hold broker-dealers accountable for their actions.

In some cases, FINRA has been criticized for not taking action against broker-dealers who have engaged in unethical or illegal practices, such as insider trading or fraud.

Additionally, some investors have reported that FINRA did not respond to their complaints or take action against the broker-dealers involved.

This has led to a lack of trust in FINRA’s ability to protect investors and to maintain the integrity of the financial markets.

Also Read: Retail Investors Say FINRA Abused Its Power by Halting MMTLP

Transparency and Accountability

In addition to these issues, FINRA has also been criticized for its lack of transparency and accountability.

For example, some critics argue that FINRA’s decision-making process is not transparent and that it is not accountable to investors or the public.

Additionally, FINRA’s funding model has also been criticized, as it is funded largely by the securities industry, which some argue creates a conflict of interest.

Overall, while FINRA plays a crucial role in regulating the securities industry and protecting investors, it has faced criticism for its handling of certain cases and its failure to adequately police the industry.

Critics argue that its arbitration process is biased, that it does not adequately hold broker-dealers accountable, and that it lacks transparency and accountability.

It is important for FINRA to address these concerns and to work to improve its processes and policies in order to better protect investors and maintain the integrity of the financial markets.

What Can Retail Investors Do?

FINRA market manipulation | Is FINRA corrupt?
FINRA market manipulation | Is FINRA corrupt?

Retail investors can voice their opinions and concerns on FINRA market injustices on social media in order to raise awareness. #FINRAFraud

Share this article if you found it valuable to the community.

Thank you for being a loyal reader of the blog. We are dedicated to providing valuable and informative content that is free of charge to our readers. However, running a blog is not free, and we rely on the support of our readers to keep our content accessible to all.

If you have enjoyed our content and have found it useful, please consider making a donation to help us continue to provide high-quality content. Your support will help us to continue to produce valuable content and to improve our website and services.

Every donation, no matter how big or small, is greatly appreciated. If you are able to support us, please click the “Donate” button below and make a contribution. Your support will make a big difference to our ability to continue providing valuable content to our readers.

Thank you for your support and for being a valued reader of the blog.

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