It’s not just the Redditor crowd that’s watching the alleged #citadelscandal.
An organizer of a class-action lawsuit against the market maker accused of having a too-cozy relationship with trading app Robin Hood told The Post that lawyers are keeping an eye on social media, too.
They’re looking for any clues that might bolster their case that Robinhood clients got a bum deal when the trading app routed their orders through Citadel Securities, the Ken Griffin-run firm that cleared Robinhood’s trades in exchange for a fee.
Josh Bowder, the son of Hermitage Capital’s Bill Bowder, who’s helping to organize a class-action suit, wouldn’t disclose what — if anything — the lawyers have found, but he said people who are part of the proposed class are making sure to keep the spotlight on the issue by keeping it on the tips of their Twitter tongues.
They seem to have succeeded with #citadelscandal trending on social media Thursday.
“It’s all connected… the people helping trend these topics are likely in on the suit,” one Reddit insider told The Post. “The trending hashtag will happen more and more often.”
Browder is CEO of Do Not Pay — a legal service that helps with class-action lawsuits — and he says the more #citadelscandal trends, the sooner a lawsuit could be wrapped up. “Things leak in discovery … so this could mean more bad PR for Robinhood,” he said.
A judge in Florida federal court denied certification of the class, but Browder said they’re asking the judge to reconsider and will present the court with more information.
Citadel Securities has denied any wrongdoing, as has Robinhood, run by CEO Vlad Tenev. Griffin and Tenev have vehemently denied even knowing each other.
The class-action suit is a response to the controversial decision in January to halt trading in stocks popular with the Reddit Rally crowd, like GameStop and AMC, resulting in questions about the trading app’s business model and its relationship with Citadel.
Citadel pays Robinhood for its order flow — and in return gets to see the data about trades Robinhood users are making. Some day traders have come to believe Citadel Securities — which was started by Griffin, who also launched a hedge fund called Citadel — is in cahoots with Robinhood.
Even President Biden’s SEC chief Gary Gensler has vowed to look into Robinhood’s practice of selling customer order flow to high-speed trading firms like Citadel Securities. “There are costs,” Gensler has said of Robinhood’s no-fee trading model. “The costs are below the surface.”
Citadel has publicly denied the Reddit crowds’ allegations on Twitter.
In a statement to The Post a Robinhood spokeswoman said, “We stand by our clearing broker Robinhood Securities’ decision to place temporary restrictions on the purchase of a limited number of securities in the face of unprecedented market conditions… Robinhood Securities did not make this decision at the direction of any market maker or other external party.”