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STOCK MARKET NEWS:
Ken Griffin denies Citadel uses personal information from retail investors
Citadel CEO Ken Griffin dismissed as “flat out false” the allegation that his company incorrectly uses information it amasses from its market-making operation.
Griffin spoke in an interview with CNBC on Friday, one day after Citadel and other market makers came under examination from Congress about their function in last month’s GameStop mania.
“I think there’s been a number of misperceptions about the data we receive from the brokerage community. In fact, a prominent U.S. senator asked us specifically about what personal identifying information do we receive from retail investors. The answer is none,” Griffin informed “Squawk Box” co-host Andrew Ross Sorkin.
Market makers such as Citadel Securities pay e-brokers like Robinhood for the right to perform client trades. The broker is then paid a little cost by the market makers for the shares that are routed, which can amount to millions when consumers trade actively. Robinhood got more than than $221 million in “payment for order flow” in the 4th quarter of 2020.
Nevertheless, market makers have actually come under examination, particularly in the context of the GameStop trading chaos, about the information they have the ability to amass from the circulations of retail customers. In many cases, critics hypothesized how Citadel, which runs hedge fund and market-making operations as different business, might utilize that information.
“This conspiracy theory that we some how or another are like some of the big tech giants that have access to personal identifying information is just flat out false,” stated Griffin. “We have a price, quantity, a limit. That’s what comes to us in an order from a retail broker.”
Citadel Securities performs approximately 40% of all retail volume, Griffin informed your home Financial Solutions Committee on Thursday throughout the GameStop hearing.
“We receive an order and as the party that has to execute that order what we look at at the moment of receipt is what are the various options that we have to achieve the very best execution for that order,” stated Griffin. “We are not permitted to trade in front of that order. Any execution that we can achieve in the context of the market for fulfilling that order we must provide back to the retail investor, sometimes even with our pricing improvement that we add on at the moment of execution.”
Griffin, in addition to the CEOs of Robinhood, Reddit and Melvin Capital, were pushed by members of your home committee on Thursday relating to last month’s legendary brief capture in GameStop’s stock.
The Citadel primary protected a questionable technique brokerages utilize to generate income, payment for order circulation and stated his company would adjust if brand-new guidelines restricted the practice. Robinhood and other brokers depend on “payment for order flow” as their earnings engine in lieu of commissions.
Griffin was likewise pushed about the relationship in between Citadel Securities and Citadel the hedge fund, which injected $2 billion into Melvin Capital once the latter took significant losses from shorting GameStop. Griffin consistently rejected the company had anything to do with Robinhood’s choice to limit trading in GameStop. Robinhood has stated it did so in order to satisfy capital requirements from its trade clearing company.
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Citadel CEO Ken Griffin dismissed as “flat out false” the allegation that his company incorrectly uses information it amasses from its market-making operation.
Griffin spoke in an interview with CNBC on Friday, one day after Citadel and other market makers came under examination from Congress about their function in last month’s GameStop mania.
“I think there’s been a number of misperceptions about the data we receive from the brokerage community. In fact, a prominent U.S. senator asked us specifically about what personal identifying information do we receive from retail investors. The answer is none,” Griffin informed “Squawk Box” co-host Andrew Ross Sorkin.
Market makers such as Citadel Securities pay e-brokers like Robinhood for the right to perform client trades. The broker is then paid a little cost by the market makers for the shares that are routed, which can amount to millions when consumers trade actively. Robinhood got more than than $221 million in “payment for order flow” in the 4th quarter of 2020.
Nevertheless, market makers have actually come under examination, particularly in the context of the GameStop trading chaos, about the information they have the ability to amass from the circulations of retail customers. In many cases, critics hypothesized how Citadel, which runs hedge fund and market-making operations as different business, might utilize that information.
“This conspiracy theory that we some how or another are like some of the big tech giants that have access to personal identifying information is just flat out false,” stated Griffin. “We have a price, quantity, a limit. That’s what comes to us in an order from a retail broker.”
Citadel Securities performs approximately 40% of all retail volume, Griffin informed your home Financial Solutions Committee on Thursday throughout the GameStop hearing.
“We receive an order and as the party that has to execute that order what we look at at the moment of receipt is what are the various options that we have to achieve the very best execution for that order,” stated Griffin. “We are not permitted to trade in front of that order. Any execution that we can achieve in the context of the market for fulfilling that order we must provide back to the retail investor, sometimes even with our pricing improvement that we add on at the moment of execution.”
Griffin, in addition to the CEOs of Robinhood, Reddit and Melvin Capital, were pushed by members of your home committee on Thursday relating to last month’s legendary brief capture in GameStop’s stock.
The Citadel primary protected a questionable technique brokerages utilize to generate income, payment for order circulation and stated his company would adjust if brand-new guidelines restricted the practice. Robinhood and other brokers depend on “payment for order flow” as their earnings engine in lieu of commissions.
Griffin was likewise pushed about the relationship in between Citadel Securities and Citadel the hedge fund, which injected $2 billion into Melvin Capital once the latter took significant losses from shorting GameStop. Griffin consistently rejected the company had anything to do with Robinhood’s choice to limit trading in GameStop. Robinhood has stated it did so in order to satisfy capital requirements from its trade clearing company.
Subscribe to CNBC PRO for special insights and analysis, and live organization day programs from all over the world.
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question, you know it's been at least
15 years since I've been following the news, no 10 my folks do that, hmm. what was the question again !?
where you read about this ?
of course I can, it was here
on U-S-NEWS.COM
