Citadel Denies Having 'Insider Trading Group'

Jul 26 2013 | 11:24am ET

Citadel Investment Group moved to distance itself from the criminal charges against SAC Capital Advisors, saying that it never had an "insider trading group."

The SAC indictment includes the allegation that the hedge fund hired Richard Lee from Citadel in 2009 despite warnings that Lee was a known member of Citadel's "insider trading group." Lee pleaded guilty to illegal trading while at SAC this week.

Citadel, which has not been accused of any wrongdoing, defended itself against the allegation.

"Citadel does not have, and never has had, an 'insider trading group,'" it said. "Citadel has strict rules against, and oversight designed to prevent, insider trading. Any suggestion to the contrary is baseless and without merit."

Citadel elaborated on its reasons for firing Lee, which it said had nothing to do with insider-trading. Instead, the hedge fund said, Lee had violated its policies on internal transfers of positions.

"Mr. Lee's actions would have impacted only his potential future compensation," Citadel said. "Within hours, Mr. Lee's misconduct was reported to Citadel management. Mr. Lee was immediately terminated."

In Depth

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


U.S. Trust's Beard: The Rapid Growth of the Art Lending Industry

Oct 7 2016 | 10:55pm ET

Alternative investment managers have emerged as some of the most significant art...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...