Citadel Pays $22 Million Settlement For Frontrunning Its Clients

Last May we reported that, after years of railing against Citadel’s dominant position at the intersection of HFT trading and retail orderflow – Citadel was recently found to be the largest private US trading venue – Federal authorities were investigating the market-making arms of Citadel LLC and KCG Holdings looking into the possibility that the two giants of electronic trading are giving small investors a poor deal when executing stock transactions on their behalf.
As a reminder, Citadel is so big and its own private stock-trading platform is so large that, if it were an official exchange recognized by the Securities and Exchange Commission, it would one of the largest registered exchanges in the United States – bigger than Nasdaq. Citadel Execution Services, the firm’s wholesale market-making unit, recently executed 35% of all trades by retail investors in U. S.-listed stocks.

This post was published at Zero Hedge on Jan 13, 2017.