Citadel owns E-trade

Citadel Set To Control 97.5% Of E-Trade’s Order Flow

“Ken Griffin’s recent announcement that he is divesting a major portion of his E-Trade holdings presumably demonstrates a divergence of the paths of the two firms, while in fact Citadel is getting ever more intertwined with the online broker’s operations, in fact giving the Chicago firm almost exclusive control over E-Trade’s customer trade flow…In order to get access to nearly double the order flow from E-Trade it currently sees, Citadel is willing to make an upfront $100 million payment to the brokerage the until 2 years ago was selling mortgages, whose resultant implosion left it on the verge of bankruptcy…

Let’s not forget that Citadel (along with Goldman Sachs) is a minority owner of Direct Edge, which is at the heart of the Flash trading scandal, and is the one firm that to date has refused to voluntarily ebolish Flash trades. Perhaps the OTS should figure out what informational advantage (if any) Citadel gleans from Direct Edge either directly or indirectly, and then decide on whether the proposed transaction is truly for the benefit of E-Trade’s numerous customers.”

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