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PANews reported on September 22 that the U.S. Securities and Exchange Commission (SEC) today announced a settlement of charges against broker-dealer Citadel Securities LLC. The order accused Citadel Securities of violating Reg SHO Rule 200(g). The regulatory framework, designed to address abusive short selling, requires broker-dealers to mark sales orders as long, short or short exempt. Regulators often use these records to police prohibited short-selling activities. To settle SEC charges, Miami-based Citadel Securities agreed to pay a $7 million fine.
According to the SEC order, over a five-year period, it is estimated that Citadel Securities incorrectly flagged millions of orders, inaccurately indicating that certain short sales were long sales and vice versa. The SEC's order found that the inaccurate markings were due to coding errors in Citadel Securities' automated trading systems and that the company provided inaccurate data to regulators, including the SEC, during this period.

