> But this seems like a shill article in general, as there's nothing mentioned about the fact that Citadel makes up more more than 35% of Robinhood's revenues[1].
Let's count all the people that would need to be involved in this conspiracy. First, obviously the Robinhood executives themselves. Second, the portfolio managers at Citadel's hedge funds who would be holding the large short position. Third, the market makers at Citadel Securities. Remember Citadel Securities is a separate company, with a legally mandated Chinese firewall prohibition them from discussing operations with the hedge funds. Fourth, the other internalizers that Robinhood uses, like Virtu and SIG, who would clearly wonder why the order flow they're paying for went dark.
Fifth, the DTC clearinghouse. If Robinhood made a false claim about its collateral at the DTC, they'd clearly either correct it if they weren't in on the conspiracy. Sixth, JP Morgan, Goldman Sachs and other banks, that extend Robinhood credit. Obviously if Robinhood wasn't actually near the end of its credit line, they would have no reason get involved with the lie.
Seventh, Robinhood wasn't the only broker to restrict trading. So clearly in this scenario Citadel must have colluded with Interactive Brokers, WeBull, Apex Clearing, TD Ameritrade, and Merrill Lynch. All of whom restricted trading at the same time for the same stated reason. Eight, the SEC, who has transparent access to the collateral position of licensed brokers, and would be able to reveal the lie, unless they were in on it.
So let's add all that together. A massive lie involving hundreds of people between Robinhood, Citadel Investments, Citadel Securities, Virtu, SIG, JP Morgan, Goldman Sachs, the DTC, the SEC, WeBull, Merrill, Ameritrade, Interactive Brokers, and Apex Clearing. Among which any single whistle blower could easily unravel a paper trail a mile long.
And why would they even do this. Citadel Securities makes $6 billion a year from its. Citadel's hedge funds have $30 billion under management. Even if they were at risk of losing their entire $2 billion investment in Melvin, that's still a drop in the bucket. Certainly not worth risking the entire company in harebrained conspiracy.
Is it possible? Sure, a lot of things are possible. But it's a pretty outlandish claim, with zero evidence to back it up. About on par with typical QAnon fantasies.