Citadel Sues to Crush Competitors

“You’re the one who’s trying to regulate your way into a market victory”

Judge Justin Walker

Citadel Securities LLC is suing the SEC to stop curbs on high frequency trading:

A federal judge challenged a lawyer for Citadel Securities LLC about its efforts to thwart a new kind of market order from IEX Group Inc., the stock exchange operator made famous by “Flash Boys.”

“It’s you who’s going to a federal agency and saying stop a private entity from doing what they want to do,” U.S. Circuit Judge Justin Walker said at a hearing in Washington on Monday, after attorney Jeffrey Wall argued that the order type interferes with the natural course of the market.

The order type, known as D-Limit, has a roughly 350-microsecond delay to blunt the advantage of high-frequency traders.

Citadel makes massive sums from high frequency trading.

Brad Katsuyama created the IEX to stop high frequency traders from front running mutual funds and other investors. Now, IEX is offering a new technology, the D-Limit order, to help.

So Citadel sues the SEC to make them stop!

Imagine if Blackberry could’ve sued the government to make it stop the iPhone. Well, Blackberry might be doing a whole lot better today.

But the average person wouldn’t.

In Citadel’s defense, they’re having a tough time lately. Average investors in meme stocks like AMC Entertainment Holdings, Inc. are suing them in Florida.

And the SEC is considering a ban on payment for order flow, one of Citadel’s main sources of revenue.

It’s interesting to see who’s for the D-limit order. One proponent is Vanguard Group, which holds the savings of many individual investors, including me.

Vanguard is evidently convinced that circumventing high frequency traders will help the average investor. But for Citadel, Vanguard is competition in the market.

And Citadel will stop at nothing to win.

The only real question is: will we let Citadel lobby and sue its way to total control of markets?


This is the last blog for this week. There will be no blog next week; I’ll be visiting Barcelona!

See you on Monday, November 29th.

Until then, enjoy a few of my favorite posts. Happy Thanksgiving, everyone!

Starting a Financial Plan from 0

Citadel Builds Huge Position in AMC Call Options

Male Contraception With an Ultrasound Device?

NJ’s Best Apple Cider Donut

The Painting I Love the Most

Photo: “Ken Griffin” by DanGPhotos1 is licensed under CC BY 2.0

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