Citadel, JPMorgan Patch Things Up

Sep 22 2008 | 3:45am ET

The trading tiff between JPMorgan Chase and Citadel Investment Group is over almost as quickly as it started.

JPMorgan cut off counterparty trading with the Chicago-based hedge fund on Thursday, reportedly in response to the latter’s poaching of several employees. But the two sides had ironed out their differences by Friday, and JPMorgan lifted its trading ban.

The dispute between the two banks came to a head following Citadel’s hire of Greg Boester, an adjustable-rate mortgage securities trader on Wednesday. JPMorgan has complained that earlier Citadel hires of its employees have been in violation of contractual agreements, a point that Citadel disputes. But Boester’s hire was apparently the straw that broke the camel’s back, as Steve Black, co-head of JPMorgan’s investment bank, called Citadel founder Kenneth Griffin on Wednesday night to inform him that the hedge fund could no longer trade with JPMorgan, The Wall Street Journal reports.

The trading bar did not affect JPMorgan’s financing and clearing arrangements with Citadel, a point that Griffin emphasized in a letter to investors.

“We do not anticipate any disruption to our business, as we continue to interact closely with our numerous other trading counterparties and with JPMorgan for both clearing and financing,” Griffin wrote. “We regret that JP Morgan has chosen this course of action.”


In Depth

Malik: The Science of Deal Sourcing 201

Aug 27 2015 | 5:35pm ET

Deal sourcing is understandably a hot topic among private equity firms because it...

Lifestyle

Rolling Art Advisors Marketing Collectible Car Fund As Uncorrelated Alternative

Aug 27 2015 | 6:47pm ET

A new fund is trying to provide investors with greater access to an emerging asset...

Guest Contributor

Agecroft Partners: Hedge Fund Industry Assets to increase $250B by Summer 2016

Aug 11 2015 | 11:29am ET

Assets will continue to flow into the hedge fund industry despite long-standing...

 

Editor's Note