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Investigation into Citadel PFOF routing goes back years

Annoy Ken Griffin - Share This

The authorities knew about Citadel and it’s dodgy practices years ago it seems, and did virtually nothing about it.

In this article from Reuters from back in 2016, US Federal authorities are investigating Citadel and KCG Holdings looking into the possibility that the two companies are giving small investors a poor deal when executing stock transactions on their behalf.

The Justice Department has subpoenaed information from Citadel and KCG related to the firms’ execution of stock trades on behalf of clients, according to people familiar with the investigation.

The full article from 2016 is here.

The article says “Authorities are examining internal data concerning the routing of retail stock orders through exchanges and alternative trading systems (ATS), to see whether they are giving customers unfavorable prices on trades in order to capture more profit on the transactions.”

Under Securities and Exchange Commission rules, U.S. brokers are legally required to seek the “best execution reasonably available” on orders, a standard meant to ensure that all customers get a favorable price and a swift trade.

At, we argue constantly that Payment for Order Flow practises (as engaged in by Citadel) should be banned, because of the clear potential for abuse and fraud. It’s worth remembering that PFOF was first started by Bernie Madoff, who is now doing 150 years of jail time for his $50B ponzi scheme, and who used the practice to engorge his scam.

Investigation into Citadel PFOF big news again.

This seems to be evidence that the regulators knew of Citadel’s dodgy practises as far back as 5 years ago….and so far have done absolutely nothing about it, although the story has raised it’s head again recently, as Gary Gensler says he is considering banning the PFOF practice. does not guarantee the accuracy of any information in the article. This is not financial advice.

Annoy Ken Griffin - Share This