Citadel Securities Fined by FINRA

Posted on July 27th, 2020 at 3:50 PM
Citadel Securities Fined by FINRA

From the Desk of Jim Eccleston at Eccleston Law LLC:

Citadel Securities agreed to pay a $700,000 fine as well as an unspecified amount of restitution to settle alleged violations with FINRA Enforcement. According to FINRA Enforcement, Citadel traded ahead of certain inactive over-the-counter customer (“OTC”) orders, failed to consistently apply its written methodology to certain OTC customer orders, failed to display certain OTC customer limit orders and also had related supervisory failures.

According to a Letter of Acceptance, Waiver and Consent (“AWC”) signed by Citadel, between September 2012 and September 2014, Citadel’s over-the-counter equity trading desk traded ahead of inactive OTC customer orders. According to FINRA, this conduct violated FINRA Rule 5320. FINRA also alleged that between October 2012 and September 2018, the OTC desk failed to display certain customer limit orders.  According to FINRA, this is a violation of FINRA Rule 6460.

Additionally, FINRA alleged that Citadel failed to establish a supervisory system reasonably designed to achieve compliance with trading ahead and limit order display rules for OTC customer orders. According to FINRA, this is a violation of FINRA Rule 3110(a) and (b), NASD Rule 3010(a) and (b), as well as FINRA Rule 2010. 

By signing the AWC, Citadel accepted and consented to the entry of FINRA’s findings, without admitting or denying those findings.

The attorneys of Eccleston Law LLC represent investors and advisors nationwide in securities and employment matters. The securities lawyers at Eccleston Law also practice a variety of other areas of practice for financial investors and advisors including Securities FraudCompliance ProtectionBreach of Fiduciary DutyFINRA Matters, and much more. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services. If you are in need of legal services, contact us to schedule a one-on-one consultation today.

Related Attorneys: James J. Eccleston

Tags: eccleston, eccleston law, james eccleston, citadel securities, finra, fine, enforcement

Return to Archive



I am so glad I found you! Wow! I appreciate your help, concern and guidance.



February 23, 2024
Advisor Accepts Industry Bar Amid FINRA Probe into Outside Business Activities

John A. Dougherty, a veteran advisor with 23 years of experience, agreed to an AWC (Acceptance, Waiver, and Consent) after refusing to cooperate with a regulatory investigation into allegations of undisclosed outside business activities.

February 22, 2024
Key Considerations for Advisors When Assessing the Financial Soundness of Annuities

While rating agencies like Fitch and S&P Global Ratings generally highlight the strength of annuity issuers, advisors still should scrutinize certain factors in their assessment process.

February 21, 2024
SEC Alleges Fraud Against Morgan Stanley and Former Executive in Block Trading Business

As reported by the Wall Street Journal, the Securities and Exchange Commission (SEC) has charged Morgan Stanley & Co. LLC and its former head of equity syndicate desk, Pawan Passi, with a multi-year fraud involving the disclosure of confidential information related to block trades.