Citadel Securities fined $180k by FINRA

Citadel Securities LLC has agreed to pay a $180k fine as a part of a settlement with the United States Financial Industry Regulatory Authority (FINRA) concerning inaccurate reports of 6.5M equity sale transactions between September 14, 2015 and July 21, 2016.

On September 14, 2015, Citadel Securities released a new system designed to implement the new order marking and trade reporting methodologies required by FIRNA. However, the firm inadvertently omitted one of its execution systems as part of the release, and thus reported trades using the historical methodology.

This omission caused Citadel Securities to report 6.5 million short sale equity transactions to the TRF without the short sale indicator. The firm remediated the issue on July 21, 2016 after FINRA notified the firm of the issue. The 6.5 million trade reporting violations represented approximately 4-6% of Citadel Securities' daily reported trades during the period from September 14, 2015 through July 21, 2016.

In addition, between September 14, 2015 and July 21, 2016, Citadel Securities reported approximately 6,660 long sale trades to the TRF with a short sale indicator as a result of the system issue.

Consequently, between September 14, 2015 and July 21, 2016, Citadel Securities did not have in place a supervisory system, reasonably designed to achieve compliance with FINRA Rules 6182 and 7230A(d) in violation of FINRA Rules 3110(a) and (b) and 2010.

On top of the fine, the firm has consented to a censure.