Opinion: Citadel’s Ken Griffin describes accusations that market makers have colluded with Robinhood as a ‘bad comedy joke’
Ken Griffin may not yet have been told about the #KenGriffinLied meme on social media.
During an interview Wednesday morning at Dealbook Online Summit, billionaire hedge fund founder Citadel LLC and market maker Citadel Securities criticized the legion of retail investors who still believe he played a key role in the abrupt end. From January’s short, chaotic squeeze on meme stocks like GameStop
When pressed on the idea that Griffin is sitting in the middle of a meme stock movement, and that many retail investors believe his role as a ubiquitous market maker flows from Robinhood
and other commission-free trading platforms, while also running a massive hedge fund, creating a situation in which he has a great deal of power, Griffin responded.
“Most of the people I work with like the fact that you, as a retail investor, trade right away and get a better price on the exchange,” said Griffin, defending the controversial practice of paying for order flow.
But while many retailers now want the SEC and other regulators to consider the practice, their real problem with Griffin stems from the fact that they see him as an almost Rasputin-like figure in Robinhood’s move to restrict trading in GameStop shares at The first of January. 28.
Because Citadel Securities uses pay-to-order flow to pay for the privilege of executing more than half of Robinhood’s trades, it’s a major source of app revenue, and the importance of this relationship has fueled conspiracy theories that Citadel Securities executives have relied on Robinhood short squeeze by restricting users from buying meme shares.
Citadel LLC’s $2.75 billion investment in/bailout of Melvin Capital, the hedge fund managed by targeted retail investor Gabe Plotkin, fanned the flames of those theories, as did An amended lawsuit filed in Florida on September 21 On behalf of a group of retail investors who claimed to have shown evidence that Robinhood executives were speaking with their counterparts at Citadel Securities the day before the restrictions were announced.
SEC investigation in short press on GameStop No evidence of collusion was found, which is something Griffin and his team celebrated publicly.
On Wednesday, Griffin shared his experience in the middle of the storm.
“The whole GameStop conspiracy theory, I mean it comes and goes,” Griffin said, explaining that he doesn’t spend much time on Reddit. “It was great to be at the center of that plot.”
When asked how he felt, Griffin indulged both his critics and a certain New York TV show.
“It was like a bad comedic joke,” Griffin replied. “It was like drawing Saturday Night Live the whole time.”
But Griffin clearly had no front row seat in the plot. He stated on Wednesday that he does not have a Twitter account and that “people just came down and told me what’s going on.”
These folks will be busy on Wednesday afternoon as retail investors on social media mocked Griffin’s appearance, and the expected outcome was like Ken Griffin’s call to talk about meme stock, to many, as a question for Kanye West about his thoughts on the Kardashian.
“Ken Griffin lied (again)” read the headline of a popular post on the subreddit r/AMCStock on Wednesday afternoon.
On Twitter, the snippets were more straightforward:
Despite multiple threads on social media pledging to use Griffin’s comments as fodder for their favorite stocks, both GameStop and AMC Entertainment
It was down more than 4% Wednesday afternoon.
Griffin also made the news with his growing concerns about inflation, his advice to the White House that fiscal stimulus has gone too far, his persistent skepticism toward cryptocurrency, and his new pledge to spend part of his fortune to defeat Illinois Governor J.B. to his hometown, Chicago.