I would like to share some more FINRA ‘discipline’ with y’all, this time it’s Citigroup (again…)
As these releases convey a ton of information, I hope this format makes sense:
- I am going to outline what Citigroup did from points from the filing.
- I am going to pull the rules they broke and attempt to provide wut mean definitions while breaking each section against Citigroup down a bit further.
- I will talk about the penalty levied.
- I will discuss how the nefarious behavior could impact GameStop.
- Lastly, TLDRS.
Citigroup is a repeat offender
What Citigroup did (without admitting or denying):
Wut mean?
- From October 2016-July 2020, Citigroup incorrectly stated that it was acting as an agent (a middleman facilitating the trade between two parties) when it was actually trading as a principal (trading out of its own account).
- They sent out approximately 37,000 trade confirmations that contained incorrect information via their Alternative Trading System–an SEC-regulated trading venue in which a computerized system matches buy and sell orders of securities.
Penalty?
Without admitting the findings, $250,000 fine, and censure.
How could this impact GameStop?
- Citigroup incorrectly reported its role in 37,000 trades.
- If these inaccuracies relate to short sales, then there is concern about whether the firm is properly tracking its short positions.
- ATS platforms (where this trading went down) are already less transparent than public exchanges, and since Citigroup was acting as a principal, it’s trading for its OWN account, would potentially include short positions.
TLDRS:
- From October 2016-July 2020, Citigroup incorrectly stated that it was acting as an agent (a middleman facilitating the trade between two parties) when it was actually trading as a principal (trading out of its own account).
- Citigroup incorrectly reported its role in 37,000 trades.
- If these inaccuracies relate to short sales, then there is concern about whether the firm is properly tracking its short positions.
- ATS platforms (where this trading went down) are already less transparent than public exchanges, and since Citigroup was acting as a principal, it’s trading for its OWN account, would potentially include short positions.
- Penalty? Without admitting the findings, $250,000 fine, and censure.