On 22 September 2023, SEC settled charges against B/D for Reg SHO (short selling) violations.
- SEC settled charges against Citadel Securities for millions of violations of Reg SHO.
- Reg SHO is regulatory framework designed to prevent abusive short selling practices.
Allegations
- For five years, Citadel incorrectly marked millions of orders, inaccurately denoting certain short sales as long sales and vice versa due to a coding error in firm's system.
- Firm provided this inaccurate data to regulators, including the SEC, during this period.
- In December 2020, Citadel staff discovered the miscoding and proceeded to correct it.
Violations
- As a result of the conduct and inaccurate reporting described above, Citadel Securities was accused of willfully violating Rule 200(g), Regulation SHO (17 CFR 242.200(g)).
Enforcement
- Recognizing Citadel's ongoing remediation, the SEC imposed a cease and desist order.
- Additionally, the SEC imposed a censure and a civil monetary penalty of $7 million.
