Citadel Securities pays $7 mln to settle charges it violated short-sale rules (updated)

Citadel Income Fund

22/09/2023 15:29

(Adds detail and context, Citadel statement)
    By Pete Schroeder
       Sept 22 (Reuters) - The U.S. Securities and Exchange
Commission said on Friday that Citadel Securities LLC, a
Miami-based hedge fund, had agreed to pay $7 million to settle
charges it incorrectly handled millions of orders and violated
short-selling rules. 
    In a statement, the SEC said Citadel Securities over a
five-year period had incorrectly marked millions of orders,
denoting short sales as long sales and vice versa. It said those
incorrect markings resulted from a coding error in the firm's
automated trading system. The SEC said the firm also provided
incorrect data to regulators during that time.
    In a statement, a Citadel spokesperson said the error was
identified and addressed by the firm more than three years ago.
    “While updating our systems to accommodate certain client
requests, we made a coding change that inadvertently affected a
de minimis percentage of our order markings," the spokesperson
said.
    Without admitting or denying the charges, Citadel agreed to
pay the penalty, as well as certify in writing the coding error
has been addressed and to review its programming and coding
logic.

 (Reporting by Rami Ayyub, Pete Schroeder and Carolina Mandl;
Editing by Kirsten Donovan)
 ((Rami.Ayyub@thomsonreuters.com;))