I know this letter probably won’t change much, but writing it has been therapeutic for me after dealing with this situation for so long. I have also printed these for individual members of the House Financial Services Committee to send via direct mail - since emails haven't seemed to get me anywhere in terms of a response or acknowledgement. It outlines how Citadel Securities’ (I decided to pick the easy target) dual role as a market maker and hedge fund poses risks to market fairness and retail investors. Sharing here in case it resonates with anyone or sparks further action. Cheers!

____________________________

The Honorable [Representative/Senator’s Name]

[Office Address]

Dear [Representative/Senator’s Name],

I write to you with a deep sense of urgency and concern regarding the conflicts of interest and potential market manipulation perpetuated by Citadel Securities, one of the largest market makers and hedge funds in the U.S. The intertwining roles Citadel plays—acting simultaneously as a market maker and hedge fund—present clear risks of abuse that could constitute direct violations of critical SEC regulations. I am compelled to bring your attention to these issues, which not only undermine market integrity but also threaten the public’s trust in our financial system.

Several SEC regulations appear to be at serious risk of violation, including:

1.  **Regulation SHO (17 C.F.R. § 242.200–204):**

This regulation prohibits naked short selling and requires the prompt delivery of sold securities within the settlement period (T 2). Citadel’s frequent fails-to-deliver, as revealed through its 13F disclosures, suggest a troubling pattern of non-compliance. The misuse of unsettled securities on such a large scale undermines the regulatory framework designed to promote fair trading practices.

2.  **Section 9(a) of the Securities Exchange Act of 1934 (15 U.S.C. § 78i):**

This provision prohibits manipulative activities intended to create deceptive market signals. Citadel’s ability to observe order flows through its market-making arm while simultaneously engaging in speculative bets through its hedge fund raises serious concerns. This dual capacity fosters an environment where private information can be exploited for profit, destabilizing market fairness and creating a system that is disadvantageous to other participants.

3.  **Section 15(c)(1) of the Securities Exchange Act (15 U.S.C. § 78o(c)(1)):**

This statute makes it illegal for brokers and dealers to engage in deceptive practices. Citadel’s repeated violations of the Consolidated Audit Trail (CAT) reporting system, resulting in a minimal $1 million fine, highlight a disregard for accurate trade reporting. Such fines—insignificant for a firm managing billions—fail to deter misconduct and instead embolden further violations.

The growing reliance by Citadel on short positions, derivatives, and undelivered securities poses grave risks not only to retail investors but also to the broader economy. Market manipulation and deceptive trading practices jeopardize market stability and undermine public confidence in our financial institutions. It is essential that the SEC act decisively, imposing meaningful penalties and enforcing stricter compliance measures. A mere $1 million fine is not only insufficient but sends a dangerous message: that regulatory penalties are simply a cost of doing business for firms of Citadel’s scale. This is unacceptable.

The SEC’s mandate to maintain transparent, fair, and orderly markets is fundamental to a functioning economy. If left unchecked, firms with significant market power will continue to exploit loopholes at the public’s expense. As a retail investor and American citizen, I urge you to take immediate action by investigating these practices and advancing legislation that enforces greater regulatory oversight, imposes harsher penalties, and ensures transparency across all market participants. The time to act is now—before further damage is done to the integrity of our financial markets.

I respectfully request your prompt attention to this matter and look forward to your response and your efforts to restore fairness and trust in our financial system.

Sincerely,

[Your Name]