2000–2010
Citadel Securities was formed in 2002[15][16][17] as a market maker, providing liquidity and trade execution to retail and institutional clients.[18] By August 2011, the company ended its foray into investment banking to instead focus on electronic trading and market making.[19]
2011–2019
In 2014, the firm expanded its market-making offering to interest rate swaps.[20] The company was also exempted from that year's Regulation Systems Compliance and Integrity (Reg SCI) act, a decision that was criticized by U.S. financial market analysts. Both Citadel and the SEC declined to comment.[21]
In June, 2014, the firm reached a settlement with four regulatory bodies that called for fines totaling $800,000. The agencies asserted that its automated trading programs failed to block erroneous orders. In one case, the release of a test version of a program resulted in a short sale of 2.75 million shares in 11 minutes, causing the company's stock price to plunge. In another case, a mistaken order for 45,000 shares caused a stock price to rise 132%. The cited incidents occurred between 2010 and 2013.[22]
By 2015 Citadel Securities had replaced Wall Street banks as the world's largest interest-rate-swap trader by number of transactions.[23] In 2016, the company opened a new office in Sydney, Australia.[24]
In January 2017, the SEC fined Citadel $22.6 million for misleading clients regarding the way it priced trades. The SEC found that despite Citadel claiming it would provide or try to provide the best prices for retail orders routed by other broker-dealers, two of its algorithms did not internalize retail orders at the best price observed nor sought to obtain the best price in the marketplace. Citadel did not admit or deny these findings.[25] The SEC fined Citadel again in December 2018, this time $3.5 million for incorrectly reporting nearly 80 million trades from 2012 to 2016, and also "willfully violat[ing] the broker-dealer books and records and reporting provisions." Citadel admitted to these findings.[26][27]
In October 2018, Bloomberg reported that 40% of Robinhood's revenue came from selling customer orders to firms such as Citadel Securities and Two Sigma Securities.[28]
2020–present
2020
During the first half of 2020, Citadel Securities doubled its profit while generating $4 billion in revenue due to increased volatility and retail trading caused by the coronavirus pandemic.[29] In October 2020, Citadel Securities announced it would acquire IMC's NYSE market making unit,[30][31][32] making Citadel the largest designated market maker on the NYSE.[7][8] Citadel Securities also began selling
2020
During the first half of 2020, Citadel Securities doubled its profit while generating $4 billion in revenue due to increased volatility and retail trading caused by the coronavirus pandemic.[29] In October 2020, Citadel Securities announced it would acquire IMC's NYSE market making unit,[30][31][32] making Citadel the largest designated market maker on the NYSE.[7][8] Citadel Securities also began selling US Treasury and dollar interest rate swap products in Hong Kong in 2020.[33]
2021
Between February and May, House of Representatives member Maxine Waters,[41] SEC chairman Gary Gensler,[42] and Senator Elizabeth Warren[43] separately addressed how Citadel Securities' dominant market position could pose a potential future threat to the US financial system. Warren raised further concern regarding Griffin's potential conflicts of interest.[44] Congressional hearings further criticized Citadel's payment-for-order-flow arrangements, and their relationship with Ben Bernanke and Janet Yellen[45] as well as its practice of hiring officials from agencies that regulate it, including the SEC[46]
2022–2024
As of January 2022, the firm oversaw more than 2,000 listed securities.[51] In August 2022, the firm opened an office in Tokyo and announced plans to launch US fixed income offerings there.[52] By the end of 2022 Citadel Securities traded in over 35 countries, executed more than 20 percent of all US equity trades and also traded futures, options, currencies and Treasury bonds.[53] The firm ended the year with $7.5 billion in revenue, which topped the company's previous record set the year prior.[54]
As of February 2023, the Hong Kong based subsidiary of Citadel Securities was designated as a Qualified Foreign Institutional Investor (QFII) by the Chinese government, giving the company more access to mainland China's bond and stock markets.[55] In June 2023, Citadel Securities became active in corporate debt trading and introduced investment-grade trading to clients.
