Apparently still in play again, according to a bot buddy:
The
controversy with GameStop and Citadel has not been fully resolved in a way that all parties, particularly retail investors, consider "satisfactory," and no specific finding of widespread fraud or collusion by the SEC directly related to the trading halt has been publicly established. The SEC did, however, identify several issues and has since proposed rule changes to improve market transparency and resilience
The SEC's Findings and Actions
No Evidence of Collusion: The SEC's 2021 report on the "meme stock" episode found no evidence to support the conspiracy theories that Citadel or other hedge funds directly pressured Robinhood to halt trading. Citadel and Robinhood executives also denied this under oath during U.S. congressional hearings. The SEC suggested the trading restrictions were primarily due to the strain on brokerages to meet capital and clearinghouse requirements amid extreme volatility.
Focus on Systemic Issues: The SEC report highlighted broader, systemic issues in the market that the events brought to light, including the practice of payment for order flow (PFOF), market makers' influence, and short selling transparency. The agency indicated these areas warranted a closer look and potential new regulations to make the markets "as fair, orderly, and efficient as possible".
Proposed New Rules: In response to the GameStop saga, the SEC has since proposed new rules aimed at increasing transparency for short selling, addressing conflicts of interest (like PFOF), and improving overall equity market structure.
Citadel Fine (Unrelated to GameStop): In an unrelated matter in September 2023, Citadel Securities was fined $7 million by the SEC for violating short selling order-marking requirements between 2015 and 2020 due to a coding error, which the firm neither admitted nor denied
Investor Sentiment and Legal Status
Ongoing Discontent: Many retail investors remain unsatisfied, continuing to voice concerns to the SEC and online about perceived market manipulation, a lack of transparency, and alleged abuses like "naked" short selling. Public comments on proposed rules reflect the belief among some that the system remains "rigged".
Lawsuits: Multiple private class-action lawsuits alleging collusion between brokerages and Citadel were filed, but a U.S. District Court dismissed them, a decision later upheld by a Circuit Court, ruling that investors failed to show anticompetitive effects
In short, the SEC investigated the events and determined no specific wrongdoing in the trading halt, but the controversy spurred significant regulatory scrutiny and a push for market structure reforms that are still in progress
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