I spy with my Illinois eye.

Downstate here.

A rigged game?

The largest single donation in Illinois history to a political campaign by a non-candidate was made on May 15, 2017.   The donation was $20,000,000.00 and it was to Citizens for Rauner, Inc.  It was from Ken Griffin, Illinois’ wealthiest resident.

This brings his total donations to Citizens for Rauner, Inc. to over $32 million.  This includes $84,295  for lending his personal aircraft to Rauner.

Who else received money from Illinois’ wealthiest resident Ken Griffin?

$430,030 to Chicago for Rahm (Emanuel) –  The Democratic Mayor’s campaign fund

$70,000 to Friends of (Rod) Blagojevich – Imprisoned Democratic Governor

$162,000 to the campaign fund for then Democratic mayor of Chicago Richard M. Daley.

Securities Exchange Commission fines and censures Ken Griffin

Ken Griffin runs a Chicago hedge fund AND a stock exchange (Citadel LLC and KCG Holdings).   His Chicago stock exchange is said to execute a HUGE amount of trades (1 in 3 private stock sales in the United States).

The Securities Exchange Commission is the watchdog or the “cop on the beat” watching the financial services industry including stock exchanges.

On January 13, 2017, the Securities and Exchange Commission wrapped up an investigation into Citadel Securities.  Without admitting or denying the findings, Citadel Securities agreed to be censured and pay $5.2 million in disgorgement of ill-gotten gains plus interest of more than $1.4 million and a penalty of $16 million for a total of $22,600,000.00.

What was the problem with how Illinois’ wealthiest citizen was earning his mountains of money?

The SEC found that Citadel Securities was Front Running the orders. One strategy, known as FastFill, immediately internalized an order at a price that was not the best price for the order that Citadel Securities observed.  The other strategy, known as SmartProvide, routed an order to the market that was not priced to obtain immediately the best price that Citadel Securities observed.

Griffin’s hedge fund, Citadel Investment Group, has done very well indeed with high-frequency trading strategies, which best selling author Michael Lewis argues is essentially insider-trading that has “rigged” the U.S. stock market.   Bloomberg News reports The Chicago-based firm’s Tactical Trading Fund is up more than 300% since its launch in 2007.

Follow the money –  dishonest gains?

Funny thing is that Governor Rauner also owns some share of the same front running, ill-gotten earnings.   Governor Rauner disclosed in his annual statement of economic interest  that he owns a membership interest three different Citadel funds including Citadel Tactical Trading, LLC and Citadel Velocity Fund LLC.

Maybe this is how his income has tripled since he’s taken office?

Citadel Tactical Trading LLC
Citadel Velocity Fund LLC
Citadel Wellington LLC

What is Front Running?


Watch the 60 minutes story about how high frequency traders like Citadel help rig the stock market:


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Governor Rauner’s 2015 Statement of Economic Interest

 

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