Citadel Firings and Federal Subpoenas Were Nearly Simultaneous

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Firings at Citadel LLC’s Surveyor Capital unit occurred at almost the same time as federal subpoenas and search warrants were executed in a probe of short sellers. A report from Institutional Investor today notes that subpoenas and search warrants in the case were issued in October 2021.

That’s the same month that Surveyor Capital fired several portfolio managers at once.

In November, Pawan Passi, a top Morgan Stanley trader, suddenly stopped showing up for work after being ensnared in the federal probe. Surely alarm bells sounded all over Wall Street at the disappearance of such a well-known figure.

But it turns out the subpoenas and search warrants actually came even earlier, in October. This puts them in the same month as the Citadel firings.

Indeed, since it’s hard to imagine Morgan Stanley let Passi stay for long after they found out he was under federal investigation, it seems likely that the subpoenas and warrants came in late October. Bloomberg reported the Citadel firings on October 22.

So, the subpoenas and firings may have been just days apart. Surveyor itself is also under investigation in the same probe.

Could major firings and federal subpoenas that affect your firm be a coincidence? Perhaps.

But something tells me that where there’s smoke, there’s fire.

Perhaps those fired portfolio managers faced accusations of wrongdoing. Citadel may claim they acted without the knowledge of superiors, setting them up as scapegoats.

We will have to await the results of the federal investigation to find out for sure. But for me, one thing’s certain.

I wouldn’t want to be an investor in Citadel right now.

Do you think the firings and the subpoenas are related? And what do you think the fired traders know?

Leave a comment at the bottom and let me know!

More on markets:

Mass Firings at Citadel Right Before Federal Probe

FBI Raids Short Sellers

Citadel Under Federal Investigation

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Photo: Citadel LLC CEO Kenneth Griffin

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