> No. Citadel Securities (the market maker) is a separate entity than Citadel Investments (the hedge fund).
I see this line trotted out a lot. Don't disrespect your fellow HN'ers. We're not fools. I have two balls, I can throw them both in whatever direction I want. I have two cars, I can have them driven where ever I want. I have two companies, I can make them do whatever I want.
Citadel Sec and Citadel Inv represent the same people and have the same goal... to make as much money as possible for those people.
There's a legal mandated Chinese firewall between the organizations. They have entirely different employees and reporting structures. If the two were coordinating, it would have to be a conspiracy involving dozens of people in different roles across the groups.
Moreover, even if you assume that they didn't care about breaking the law and going to jail, it'd be stupid. Citadel Securities makes $6 billion a year.[1] Citadel's position in Gamestop represented a less than 1% loss to its hedge funds. At $35 billion AUM and 20% incentive fees, the impact of the Gamestop shorts on Citadel Investment's net income would be about $70 million.
You're telling me that Citadel management decided to risk jail time and a $6 billion/year franchise to save $70 million?
> There's a legal mandated Chinese firewall between the organizations.
You don't seriously believe this nonsense works, do you?
What's legally mandated is irrelevant unless the CEO of each organisation is constantly tracked, their every personal conversation recorded by government at all times.
If I own those companies, I can have lunch with one of my CEO's today, and the other one tomorrow. Now they both know what's expected of them, without there ever being a written record of anything.
These people didn't reach the pinnacle of Wall St by giving a shit about what some lawmakers scratched on paper and told them they had to follow. You're in dream land if you think the honour system works to keep Wall St. bosses honest.
That seems to me an important point, that the amount of losses here -- or even their entire stake in GME -- is actually kind of just peanuts to them. Even regardless of legal firewall, it's peanuts. When people are discussing it as if it's an existential threat to them.
(Also, guess what, no CEO or MBA is likely to lose a single multi-million dollar house over any of this, despite memes taking delight in suggesting they already have... that's not how it works for the rich, they can lose billions, especially of other people's money, and still be rich without even impaired job prospects).
I see this line trotted out a lot. Don't disrespect your fellow HN'ers. We're not fools. I have two balls, I can throw them both in whatever direction I want. I have two cars, I can have them driven where ever I want. I have two companies, I can make them do whatever I want.
Citadel Sec and Citadel Inv represent the same people and have the same goal... to make as much money as possible for those people.