Ken Griffin and Market “Rigging” as Delivering Alpha Conference Approaches

CNBC’s Delivering Alpha Conference is set to kick off Wednesday, and reporter Kate Kelly shared a preview of her interview with Citadel Investment Group’s founder and CEO, Ken Griffin. Mr. Griffin basically runs two separate companies: a $20 billion hedge fund (several) business and a securities business, “including a market-maker trading about 1 billion shares per day in volume.”

This market-maker business put the investor on the spotlight recently, after author Michael Lewis assured –in his book “Flash Boys”- that the market is “rigged” by Mr. Griffin and other high frequency traders, stock exchanges, and Wall Street firms.

CITADEL INVESTMENT GROUP

“He alleges that high frequency traders are able to front run orders, which means they are able to buy in front of you and sell them back to you when you want to buy” (CNBC). However, what he claims to be happening is not exactly front-running, which is illegal, but rather a legal form of front-running enabled by fiber-optic lines that get information to places faster than “public lines.”

However, Mr. Griffin told a Senate Committee last week that this assertion is not accurate. He stated: “new technology has created a much bearer market.”

Mrs. Kelly promised to talk about this and Mr. Griffin’s view of politics, his political contributions, and several related subjects, on Wednesday, at the Delivering Alpha Conference.

The Conference is well-known for the stock pitches that some of the best hedge fund managers make. Speculation is rising as the time approaches, and, although we have no certainties, we can take a guess on which will be some of these pitches. For instance, Mr. Griffin’s largest long stake is placed at Citigroup Inc (NYSE:C), a stock that Leon Cooperman recommended a few months ago, and one that many think could be amongst Cooperman’s picks for the Conference. Griffin could also be amongst Citigroup Inc (NYSE:C)’s supporters, since he seems quite bullish about this company: over the last reported quarter, his fund almost doubled its stake in the company. This position is now worth almost half a billion dollars.

Disclosure: Javier Hasse holds no position in any stocks or funds mentioned

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