Wall Street’s Ken Griffin hits back at those who make #KenGriffinLied trending on social media – and Reddit rejoices

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Reddit’s merry bunch of retail traders now have something they craved almost as much as the “mother of all short cuts”: Ken Griffin’s attention.

In an unusual move, the billionaire founder of Citadel and e-commerce company Citadel Securities, publicly hit back at memes traders after making #KenGriffinLied a trending social media topic. The hashtag refers to allegations by retail investors that Griffin lied to Congress about his role on Robinhood’s HOOD,
-3.34%
decision earlier this year to stop trading in meme stocks such as GameStop Corp. GME,
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and AMC Entertainment Holdings AMC,
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at the height of the short pressure in January.

A revised Federal Southern District of Florida filing submitted on behalf of individual investors uses Robinhood’s internal communications to argue that “Citadel [Securities] pressured Robinhood, ”to freeze stock trading even in the hours leading up to the trading app’s decision to do so on Jan. 28.

Citadel Securities and Robinhood unequivocally deny these allegations and did so again on Wednesday.

Griffin and Robinhood chief Vlad Tenev even did so during a Feb. 18 hearing on Capitol Hill, but individual investors who believed Griffin and Tenev were in cahoots seized the new document as indicating collusion between the two.

Late Tuesday afternoon, Griffin and his team at market maker Citadel Securities – not to be confused with its hedge fund Citadel LLC – clearly had had enough of the chatter online.

After a strongly formulated tweetstorm from the company’s rarely-used Twitter account on Monday – the company’s first tweet since late January – Griffin issued a statement to the media in which the usually-averse investor set a tone his online targets would describe as “Casting shade”.

“It must frustrate endless conspiracy theorists that Vlad and I never text, called or met,” the statement attributed to Griffin read. “But I have to say, kudos to Vlad and his team at Robinhood for their remarkable achievement.”

Griffin’s answer might not be just about the recent hashtagry.

Since January, Griffin has become a Darth Vader-like figure to the retail investment community on social media, in part thanks to his unique role at the top of one of the nation’s largest hedge funds, Citadel LLC, and co- founder of Citadel. Securities, the largest US market maker that executes about 40% of all stock transactions.

On social media, Griffin’s ubiquity in financial transactions through the activities of his companies has amplified distrust of financial markets and provided a response to the vitriolic Wall Street mogul. A photo of Griffin wearing a rather blank expression has become a fertile field for memes in which the powerful financier is often referred to as “Kenny G”.

Citadel Securities also pays for the privilege of executing more than half of Robinhood’s trades through what’s known as the pay-to-order flow, making it essentially the platform’s biggest commission-free client.

This relationship has been a source of conspiracy theory since January. Citadel LLC’s $ 2.75 billion investment in Melvin Capital, the hedge fund run by Gabe Plotkin, another executive in the sights of Reddit meme-stock fans, only added to this. perception. Melvin Capital has been rocked by its short bets against the tide on GameStop, AMC and other stocks classified as being driven by social media rather than fundamentals.

Thus, the virtual ground was seen by some as fertile for the amended lawsuit filed in Florida on September 21 on behalf of a group of retail investors.

The lawsuit includes communications between Robinhood COO Gretchen Howard, General Counsel Dan Gallagher and Chairman Jim Swartwout.

In a chat exchange dated Jan. 27, Robinhood President Swartwout said “you wouldn’t believe the conversation we had with Citadel. Total mess. “

Swartwout’s request came after Tenev wrote on Slack: “This might be a good time for me to chat with Ken. [G]riffin, ”adding a few minutes later“ I’ve never met him, ”according to the lawsuit.

In February, at a hearing hosted by the House Financial Services Committee, Griffin said his company “had no role in Robinhood’s decision to limit trading on GameStop or any other ‘meme’ actions,” answering questions from legislators on possible “collusion”. . ”

Griffin replied, “Be perfectly clear: absolutely not. “

On Twitter, a post went viral on Monday that used a video of Griffin’s testimony, interspersing it with screenshots of the new legal case in a montage intended to refute the veracity of Griffin’s testimony.

For retail investors, that tweet and a flood of posts like it was enough to immediately trigger perjury hearings, but at least one legal expert was pouring cold water on the so-called smoking gun on social media.

“It does not prove perjury and it is not necessarily liable to prosecution,” said Anthony Michael Sabino, professor of law at St. John’s University, who reviewed the complaint. “To claim that he lied to Congress on the Internet based on this is an exaggeration. “

Precisely because Citadel Securities is Robinhood’s biggest client, it is not shocking to learn that the two communicated in the face of unprecedented market movement as one side ran out of cash. , said the law professor.

Both sides made it clear to Congress that communication had taken place but, once again, strongly denied any collusion on limiting user access to GameStop and other memes.

The two did it again on Tuesday, with Tenev write a checkout flow defense in a Wall Street Journal editorial. And while Tenev didn’t mention Citadel’s name, he went out of his way to argue that his company’s relationships with market makers are key to protecting investors and “democratizing finance.”

But the new trial does one key thing: it gets everyone involved see bad enough for people who already saw them that way.

The Reddit crowd will see any lack of investigation into Griffin as yet another example of politicians and regulators protecting Wall Street billionaires, as the mere existence of evidence that the heads of Robinhood and Citadel Securities discussed prior to January 28 ( regardless of what they might have discussed) will almost certainly be enough to fuel the fires of populist rage for at least a few more months and keep retail investors backing GameStop and AMC, and looking for new short-term targets to Blow up hedge funds and fight perceived baddies like Ken Griffin.

The fact that Griffin’s legion of proud trolls have now elicited a public backlash from the man they turned into a melting pot of what they believe to be all that’s wrong with America’s financial system adds further no more fuel at this fire.

In fact, they’re already enjoying using the new online “dialogue” as a rallying point to keep the fight alive.

Responses to Citadel’s defensive tweets on Monday and Tuesday sparked a plethora of subreddit posts and tens of thousands of responses from Twitter users.

“Citadel Securities did not ask Robinhood or any other firm to restrict or limit its trading activity on January 27,” the account says tweeted late afternoon.

“That’s exactly what someone would say who asked Robinhood to restrict trade,” the parody account Litquidity responded impertinently.

Citadel’s tweet received just over 1,200 likes. Litquidity’s response received more than double that number.

Citadel’s tweet on Griffin’s statement received 255 retweets, 148 likes and over 1,500 comments (mostly negative).

In some online circles, these stats are the platonic ideal of “Getting Ratio’d”.



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