Citadel, Others Sue Options Exchanges Over Fees

May 23 2013 | 12:32pm ET

Citadel Investment Group's investment-banking arm and three other firms have sued a quintet of major U.S. options exchanges, alleging that they were overcharged.

The lawsuit, filed in Chicago state court yesterday, alleges that the Chicago Board Options Exchange, International Securities Exchange, NYSE Arca, NYSE Amex and Philadelphia Stock Exchanges all systematically overcharged or wrongly assessed fees on options trades for seven years. Citadel Securities and its co-plaintiffs say they were overcharged on millions of orders over a seven-year period.

Among the issues are how the exchanges assess market-maker-to-market-maker orders with payment for order flow fees, the firms allege, and the exchanges' refusal to do anything about it. One of the firms paid nearly $6.4 million on mis-marked orders over the period, according to the lawsuit.

"The dispute arises from the exchanges' assertion that they are entitled to mischarge their members without taking any responsibility for it and without any liability under the law," the suit alleges. The firms are seeking "recovery or restitution of all PFOF fees that were inappropriately charged by the exchanges."

Citadel is joined in the lawsuit by Group One Trading, Ronin Capital and Susquehanna Investment Group.


In Depth

Q&A: Open Season For Closed-End Funds

Aug 29 2014 | 10:00am ET

When Maury Fertig and Bob Huffman, former Salomon Brothers coworkers, launched...

Lifestyle

Och Funds Women In Finance Initiative At U-M

Aug 28 2014 | 3:01pm ET

Och-Ziff Capital founder Daniel Och and his wife have made a "generous donation"...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

The time was right

Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.