| NEW YORK
NEW YORK Aug 5 A unit of hedge fund Citadel LLC
was fined $800,000 by U.S. regulators in June for failing to
prevent erroneous orders from being sent to several stock
exchanges over a nearly three-year period.
Citadel failed to properly establish, maintain and enforce a
supervisory system to check the accuracy of orders and to reject
some orders that were mispriced or duplicated between March 18,
2010, and Jan. 8, 2013, the Financial Industry Regulatory
Authority said in a June 12 letter viewed by Reuters on Tuesday.
Citadel did not admit or deny any wrongdoing.
"We take our responsibilities as a market maker very
seriously, and continually work to improve our systems and
controls," a Citadel spokesman said. "We are committed to taking
prompt action when areas of concern are identified."
The sanctions come as regulators clamp down on issues
related to automated trading, which dominates the markets and
has received greater scrutiny since the release of the Michael
Lewis book "Flash Boys: A Wall Street Revolt" on March 31, which
claimed the markets are rigged.
Citadel failed to reasonably prevent the transmission of
erroneous orders from broker dealers on behalf of retail clients
as well as its own proprietary trading desk, to exchanges run by
Nasdaq OMX Group, BATS Global Markets and NYSE, which
is owned by Intercontinental Exchange Inc, FINRA said.
Of the $800,000 fine, Citadel was ordered to pay $420,000 to
Nasdaq, $160,000 to NYSE, $170,000 to BATS, and $50,000 to
(Reporting by John McCrank; Editing by Leslie Adler)