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Regulators ram Citadel’s gate
The Office of Thrift Supervision isn’t known as the world’s most aggressive regulators. In fact, the Obama administration wants to merge it out of existence.
So I was quite surprised when the OTS late Friday decided to suspend consideration of an application that would have enabled Citadel Investment Group to get control over virtually all of E*Trade Financial customer trades–what’s known as order flow on Wall Street.
I wrote about this move by Citadel earlier today and how it would have been a big boon to Citadel’s highly-profitable high-frequency trading business. And I urged the OTS to move cautiously on this application.
OTS spokesman William Ruberry said the agency has decided to “suspend consideration of the application while we examine certain issues.” He declined to elaborate on the regulator’s action. He added that a confidential “policy and law” letter about the decision to suspend the application had been sent to the parties.
Citadel’s E*Trade Bonanza
Citadel Investment Group’s move to aggressively sell off its substantial stake in E*Trade Financial looks like hedge fund magnate Ken Griffin is throwing in the towel on his big gamble on the online broker.
But Citadel isn’t bailing on E*Trade. In fact, if Griffin gets his way, the Chicago hedge fund will have its fingers dug deeper into E*Trade, getting daily access to virtually all of the online broker’s stock and option trades.
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The Wall
