Written by Pete Schroeder
(Reuters) – Citadel Securities LLC, a Miami-based hedge fund, agreed to pay $7 million to settle costs that it improperly dealt with thousands and thousands of orders and violated short-selling guidelines, the U.S. Securities and Alternate Fee mentioned on Friday.
Over 5 years, Citadel Securities incorrectly registered thousands and thousands of orders, marking brief gross sales as lengthy gross sales and vice versa, the SEC mentioned in an announcement. It mentioned that these incorrect marks resulted from a coding error within the firm’s automated buying and selling system. The corporate additionally made incorrect statements to regulators throughout that interval, the SEC mentioned.
A Citadel spokesperson mentioned in an announcement that the corporate recognized and addressed the error greater than three years in the past.
“Whereas updating our methods to accommodate sure buyer orders, we made a coding change that inadvertently impacted a small proportion of our order tags,” the spokesperson mentioned.
With out admitting or denying the fees, Citadel agreed to pay the high-quality, in addition to certify in writing that the coding error had been remedied and to evaluation its programming and coding logic.
(Reporting by Rami Ayoub, Pete Schroeder and Carolina Mandel; Modifying by Kirsten Donovan)