SEC Charges Citadel Securities for Violating Order Marking Requirements of Short Sale Regulations
summary
Citadel Securities LLC agreed to pay a $7 million penalty to settle SEC charges of violating Regulation SHO by incorrectly marking millions of orders as long or short sales due to a coding error.
paragraph
Citadel Securities LLC was accused of violating Regulation SHO by incorrectly marking millions of orders as long or short sales due to a coding error in their automated trading system. The alleged misconduct occurred over a five-year period and resulted in inaccurate data being provided to regulators. Citadel Securities agreed to pay a $7 million penalty and consented to a cease-and-desist order, a censure, and undertakings to remediate the coding error and review their computer programming.
narrative
The Securities and Exchange Commission (SEC) settled charges against Citadel Securities LLC for violating Regulation SHO by incorrectly marking millions of orders as long or short sales due to a coding error in their automated trading system. The alleged misconduct occurred over a five-year period and resulted in inaccurate data being provided to regulators, depriving them of important information about the markets they regulate. Citadel Securities agreed to pay a $7 million penalty and consented to a cease-and-desist order, a censure, and undertakings to remediate the coding error and review their computer programming logic. The firm did not admit or deny the findings, and the investigation was led by the SEC's Division of Enforcement. The SEC's order charges the firm with violating Rule 200(g) of Regulation SHO, which requires accurate marking of sale orders to prevent abusive short selling practices.
Classified broker-dealer-fraud(confidence 95%). EDGAR detection: forms Form D· recall 29% / precision 9%. detection rule →
Parties
alan lenarcicchristopher raycitadel securitiesdamon taaffeelcin yildirimkevin gershfeldmandy sturmfelzmark cavemelissa armstrongmiami-based citadel securitiespeter csatordayrobert nesbittsec’s orderSecurities and Exchange Commissionseth m. nadler of the sec’s home officesettled charges against broker-dealer citadel securities llcthe sec’s investigationto the sec’s division of examinationsto the sec’s division of trading and marketsto the sec’s market abuse unit
Keywords
citadel securitiessecsecuritiescitadelshortordersecurities violatingorder markingmarking requirementsshort sellingviolatingrequirementsshoviolating orderrequirements short
Exhibits & Attached Documents (1)
Extracted insights
Dollar amounts 1
- $7.00M $7 million $1M–$10M
Entities 20
- person alan lenarcic
- person christopher ray
- company citadel securities
- person damon taaffe
- person elcin yildirim
- person kevin gershfeld
- person mandy sturmfelz
- person mark cave
- person melissa armstrong
- company miami-based citadel securities
- person peter csatorday
- person robert nesbitt
- agency sec’s order
- agency Securities and Exchange Commission
- agency seth m. nadler of the sec’s home office
- company settled charges against broker-dealer citadel securities llc
- agency the sec’s investigation
- agency to the sec’s division of examinations
- agency to the sec’s division of trading and markets
- agency to the sec’s market abuse unit
Triples 17
- Securities and Exchange Commission Announced Settled charges against broker-dealer Citadel Securities LLC
- Miami-based Citadel Securities Agreed to pay A $7 million penalty
- SEC’s order Finds The inaccurate marks resulted from a coding error in Citadel Securities’s automated trading system
- Mark Cave Said Compliance with the order marking requirements of Reg SHO is a key component of regulatory efforts to curtail abusive market practices, including ‘naked’ short selling
- The order Charges Citadel Securities with violating Rule 200(g) of Reg SHO
- Citadel Securities Consented to A cease-and-desist order imposing a censure, a $7 million penalty, and a set of undertakings
- The SEC’s investigation Was conducted by Seth M. Nadler of the SEC’s Home Office
- Christopher Ray Provided assistance To the SEC’s Division of Trading and Markets
- Elcin Yildirim Provided assistance To the SEC’s Division of Examinations
- Alan Lenarcic Provided assistance To the SEC’s Division of Examinations
- Peter Csatorday Provided assistance To the SEC’s Division of Examinations
- Mandy Sturmfelz Provided assistance To the SEC’s Market Abuse Unit
- Damon Taaffe Provided assistance To the Home Office Trial Unit
- Melissa Armstrong Provided assistance To the Home Office Trial Unit
- Kevin Gershfeld Provided assistance To the Enforcement Division’s Office of Investigative and Market Analytics
- Robert Nesbitt Provided assistance To the Enforcement Division’s Office of Investigative and Market Analytics
- The investigation Was supervised by Mr. Cave
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Extracted body text (2,503c)
The Securities and Exchange Commission today announced settled charges against broker-dealer Citadel Securities LLC for violating a provision of Regulation SHO, the regulatory framework designed to address abusive short selling practices, which requires broker-dealers to mark sale orders as long, short, or short exempt. These records are routinely used by regulators in policing prohibited short selling activity. To settle the SEC’s charges, Miami-based Citadel Securities agreed to pay a $7 million penalty. According to the SEC’s order, for a five-year period, it is estimated that Citadel Securities incorrectly marked millions of orders, inaccurately denoting that certain short sales were long sales and vice versa. The SEC’s order finds that the inaccurate marks resulted from a coding error in Citadel Securities’s automated trading system and that the firm provided the inaccurate data to regulators, including the SEC during this period. “Compliance with the order marking requirements of Reg SHO is a key component of regulatory efforts to curtail abusive market practices, including ‘naked’ short selling,” said Mark Cave, Associate Director of the SEC’s Division of Enforcement. “This action against Citadel Securities demonstrates that a broker-dealer’s failure to comply with the requirements of Reg SHO can have negative downstream consequences on the accuracy of the firm’s electronic records, including its electronic blue sheet reporting, depriving the Commission of important information about the markets it regulates.” The order charges Citadel Securities with violating Rule 200(g) of Reg SHO. Without admitting or denying the findings, Citadel Securities consented to a cease-and-desist order imposing a censure, a $7 million penalty, and a set of undertakings, including a written certification that the coding error has been remediated and a review of the firm’s computer programming and coding logic involved in processing relevant transactions. The SEC’s investigation was conducted by Seth M. Nadler of the SEC’s Home Office. Christopher Ray of the SEC’s Division of Trading and Markets; Elcin Yildirim, Alan Lenarcic, and Peter Csatorday of the SEC’s Division of Examinations; Mandy Sturmfelz of the SEC’s Market Abuse Unit; Damon Taaffe and Melissa Armstrong of the Home Office Trial Unit; and Kevin Gershfeld and Robert Nesbitt of the Enforcement Division’s Office of Investigative and Market Analytics provided assistance. The investigation was supervised by Mr. Cave.
OCR text (2,503c · html-text · 99% conf)
The Securities and Exchange Commission today announced settled charges against broker-dealer Citadel Securities LLC for violating a provision of Regulation SHO, the regulatory framework designed to address abusive short selling practices, which requires broker-dealers to mark sale orders as long, short, or short exempt. These records are routinely used by regulators in policing prohibited short selling activity. To settle the SEC’s charges, Miami-based Citadel Securities agreed to pay a $7 million penalty. According to the SEC’s order, for a five-year period, it is estimated that Citadel Securities incorrectly marked millions of orders, inaccurately denoting that certain short sales were long sales and vice versa. The SEC’s order finds that the inaccurate marks resulted from a coding error in Citadel Securities’s automated trading system and that the firm provided the inaccurate data to regulators, including the SEC during this period. “Compliance with the order marking requirements of Reg SHO is a key component of regulatory efforts to curtail abusive market practices, including ‘naked’ short selling,” said Mark Cave, Associate Director of the SEC’s Division of Enforcement. “This action against Citadel Securities demonstrates that a broker-dealer’s failure to comply with the requirements of Reg SHO can have negative downstream consequences on the accuracy of the firm’s electronic records, including its electronic blue sheet reporting, depriving the Commission of important information about the markets it regulates.” The order charges Citadel Securities with violating Rule 200(g) of Reg SHO. Without admitting or denying the findings, Citadel Securities consented to a cease-and-desist order imposing a censure, a $7 million penalty, and a set of undertakings, including a written certification that the coding error has been remediated and a review of the firm’s computer programming and coding logic involved in processing relevant transactions. The SEC’s investigation was conducted by Seth M. Nadler of the SEC’s Home Office. Christopher Ray of the SEC’s Division of Trading and Markets; Elcin Yildirim, Alan Lenarcic, and Peter Csatorday of the SEC’s Division of Examinations; Mandy Sturmfelz of the SEC’s Market Abuse Unit; Damon Taaffe and Melissa Armstrong of the Home Office Trial Unit; and Kevin Gershfeld and Robert Nesbitt of the Enforcement Division’s Office of Investigative and Market Analytics provided assistance. The investigation was supervised by Mr. Cave.