Citadel was part of a group of investors and market participants that won a $1.9 billion settlement from some of Wall Street’s biggest financial institutions after alleging that the banks had conspired to limit competition in the credit-default swaps market and sabotage a CDS exchange planned by Citadel and CME Group Inc.

The banks were accused of agreeing to boycott the exchange as long as Citadel was involved.

Griffin hasn’t shown much sympathy for the competition’s woes.

“The disruptive innovation that has taken place within the equities market has created winners and losers,” he said in written testimony for a 2014 hearing of the Senate Banking Committee. It shouldn’t be a surprise that legacy participants “publicly yearn for the old days when they extracted disproportionate rents from investors on the basis of anti-competitive business practices,” Griffin added.

The regulatory overhaul that followed the financial crisis created a more level playing field, said Ahmed, the Citadel spokesman.

“This transformation of the markets has resulted in more liquidity, better pricing and lower transaction costs for end investors,” he said.

Order Flow

Market-makers pay rebates to brokerages for routing them retail client orders, which tend to be the most profitable trades because they carry the least risk.

Citadel Securities has been among the most aggressive in using rebates to win retail orders. Some market participants say the payments promote conflicts of interest and should be banned, but others say they improve order execution for retail investors.

In 2017, the firm agreed to a $22.6 million settlement with the Securities and Exchange Commission over allegations that it had misled clients over a small portion of trades in its high-frequency equities business. That didn’t slow it down much. Citadel Securities now controls about 40% of U.S. retail equity market share.

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