Welcome back to the channel everyone today, i want to talk about the secret conversation between vlad tenef of robin hood and ken griffin of citadel securities, and i also want to touch on the short squeeze lawsuit, plantiffs, slamming robin hood and citadel securities for payment for order Flow so stay tuned and let's make some money - and i also wanted to let you know that from tomorrow i will be going back to my daily pre and post market videos, rather than just the one post market video every day and just a quick one before I dive in with the key information, be sure to sign up to block file using the link down below in the description to get up to 250 dollars worth of free bitcoin. You can also earn interest on your bitcoin. You can also get crypto backed loans, and you can even get a cash back credit card with block fi, and i want to dive straight in with the key information. So less than a month after citadel securities responded to the complaint bought by investors who suffered heavy losses during the january short squeeze, the traders have also filed their response.

In fact, a number of documents were filed by the plantiffs in the multi-district litigation on september 21st. 2021, these documents include not only the response to the defendant's motion to dismiss the anti-trust tranche complaint, but also several amended complaints as well. Fx news group has examined the response and the corrected complaint in the anti-trust tranche so that more details are provided to the readers. Evidently, details would be important as the motion to dismiss attacks the complaints on several grounds, with the main one being that the complaint fails to set forth allegations of an anti-competitive agreement.

The traders say that the defendants are incorrect, as the complaint is replete with facts which, when proven at trial, will constitute evidence both direct and circumstantial. The defendants entered an anti-competitive agreement to restrict the relevant securities. The plaintiffs explain that this case is about individual investors, who invested their money in a stock market and were stripped of their rights to control their own investments. The traders accused the defendants and other market players of hatching an anti-competitive scheme to restrict retail investors, is access to the stock market and prevent the market from operating freely and fairly.

According to the traders, the defendants did so to protect each other and to stop the hemorrhaging losses incurred by the market maker defendants as a result of their accumulation of large short positions. The plaintiffs in this case claimed to represent all persons or entities in the united states that held shares of stock or call options in gamestop, amc, entertainment and many other meme stocks. Between january 27th, 2021 and february 4th 2021. The plaintiffs seek to prove the alleged conspiracy.

They note that the industry is close-knit and built on pre-existing relationships. Additionally, individuals within the industry frequently move from one market participant to another or invest financial resources in other market participants. Citadel securities is head of execution services, for instance, the plantiffs say had prior working relationships through finra with robin hood's, vice president of corporate communications during the relevant periods, according to the traders, as a result of the close-knit nature of the industry and the prior relationships developed By those individuals within the industry, there's a high number of inter-firm communications, which tend to provide opportunities to exchange information and to render a market susceptible to collusion. Given the events of late 2020 and january 2021, the participants in the conspiracy had numerous opportunities to conspire to restrain trade.

The traders note that the high-level executives of citadel securities and robin hood coordinated communications in the weeks before and numerous times the day before the restrictions were ultimately imposed. Additionally, robin hood appeared to accept citadel securities proposition made on january 20th, 2021 also, high-level employees of e-trade and citadel securities exchange communications through january 28, 2021 to confirm certain orders were cancelled. The plantiffs submit, however, that while high-level employees of citadel securities and robin hood coordinated communications via email or via internal chat channels, the emails appear cryptic with little indication about the subject matter, communicated between the participants, reserving substantive discussion of their dealings to unrecorded telephone calls. On january 27, 2021, the day before the restrictions were implemented, high-level employees of citadel securities and robin hood had numerous communications with each other.

According to the plantiffs, this indicates the citadel applied pressure on robin hoods. There's then, a script from an internal chat at robin hood. Saying just an fyi that dan and i are joining jim at 5pm on a call with citadel they reached out and want to speak this evening, and we believe they will make some demands on limiting payment for order flow across the board. We won't agree to anything but wanted to give you a heads up and vlad said.

Okay. Maybe this would be a good time for me to chat with ken griffin. You guys can mention that the plantiffs argue that citadel securities stood to gain from stopping the short squeeze by purchasing new short positions at the peak of the relevant security price increase and then profiting from the artificial decrease in share price. After the trading restriction on january 28th, there's been another internal chat communication that says anecdotal evidence that several very large firms are having really bad nights as well, and somebody else says everyone is you wouldn't believe the conversation we had with citadel total mess? The traders say that, while there is no publicly available data to show that citadel securities was one of the parties that opened up new short positions on january 25th, recall, there is no requirement that hedge funds disclose their short positions, except as described above.

It would be in citadel securities best interest to open up new short positions if citadel securities plan to leverage its relationships to halt trading of gamestop and other relevant securities and artificially depress their share price. Furthermore, according to the traders, given that robin hood relies on payment for order flow for revenue and sold a significant portion of its order flow to citadel securities, the two firms had motive to cooperate due to their close economic relationship. Indeed, in several internal conversations, high-level executives of robin hood and citadel securities stated the firms had a strong relationship and the relationship was more of a partnership. The plaintiffs add that the clearing defendants had reason to participate and join in the conspiracy.

Nscc is a member-driven corporation member clearing agents report, the trades they receive to their parent organization, the dtcc. The dtcc then ensures that transfer of money to the seller's broker account and the transfer of security ownership to the buyer's broker account to mitigate the risk of settling trades. The dtcc requires that the nsec member clearing firms put up collateral, which the nscc member clearing firms typically pass down to brokerages the dtcc collateral requirement changes depending on the perceived risk of the order, since if one side of the trade defaults and the broker cannot cover The loss dtcc member firms are on the hook for completing the trade, in other words, if a member becomes bankrupt, dtcc and its member clearing agents would be on the hook for the short position taken by that member robin hood's. Ceo.

Vlad tenef also testifies before the congressional house committee on financial services that citadel securities payment for order flow revenue is robinhood's primary source of revenue. The traders state this essentially proves the robin hood's client is not the retail investor themselves, but rather citadel securities in this relationship. It is actually the retail investor who is robin hood's product, the product for which citadel securities is in fact buying and paying robin hood a premium. The traders add that robin hood is not alone in profiting from payment for order flow, every brokerage, defendant, apex and etc.

Sell order flow additionally, citadel securities is either the largest one or the largest payers for order flow for most of them. According to the plantiffs, robin hood and other broker-dealers had every motivation to join the anti-competitive scheme to restrict trading to benefit their real clients. The clearing agents and the market maker defendants, robin hood, has gamified the investing market to funnel young investors onto their platform, ultimately to offer the market maker defendants a bird's eye view of both sides of their trades, enabling companies like citadel to benefit from simultaneously making and Playing the market, the traders argue the lawsuit continues at the florida southern district corps. The amended complaints just filed by the plantiffs will be discussed by the parties at a status conference scheduled for september 23rd, 2021..

Overall, i think this is very, very bad that there's actual email evidence of robin hood, knowing that citadel were going to make demands on limiting payment for order flow across the board and ended up agreeing to it. But it's also very very encouraging that there was anecdotal evidence that several very large firms were having bad nights and that citadel was a total mess back in january. This just goes to show that when that third cycle really kicks in and gets going, we could absolutely see the actual short squeeze. Now.

I also wanted to touch on evergrande as well, and blackrock could see the short end of the stick and potential divvy up of evergrande assets. Today, evergrande stock was up 17.6 on news. The onshore bonds were gon na get bailed out, but there's still no news on the offshore usd denominated bonds. The chinese government continued to send signals that it may allow its second largest property developer, the eva grande group, to fall to its over 300 billion dollars.

Worth of debts in a recent message sent to local governments, beijing called on these bodies to prepare for a potential evergrande collapse. Readying, its domestic investors appears to stand as a priority for the chinese government, along with instructing local administrators to prepare, while the victims expected to suffer most from an ever grinder collapse are likely. The chinese firms who benefit from its construction and the business it has invested in a number of western companies, including america's investment giant blackrock, stand to lose from the situation as well. Between january and august 2021, blackrock acquired 31.3 million notes of evergrande's death.

Britain's hsbc holdings increased its stake in the falling giant by 40 through july and switzerland ubs group boosted its position by 25 through may, and an expert on asian economics said you have past restructurings where there was a differentiated treatment between domestic and foreign investors. So that's part of the playbook when it comes to these kind of restructurings should ever grande. Indeed, collapse. Blackrock and others will lose out on the bet that the company could bounce back potentially through a government.

Bailout and evergrande bondholders have run out of hope for a coupon payment on thursday, china's evergrande group dollar bondholders were still waiting for information about a key interest payment due thursday, with some holders having given up hope of getting a coupon payment by the deadline. The property developer was instead expected to provide more information in the coming month as in maybe they will provide that bond payment at some point this month and if they don't they're going to be full, as you can see here, evergrande has two bond payments coming up. Obviously, on thursday and one next week, and both would be full if the company, which has outstanding debt of 305 billion dollars, fails to settle the interest within 30 days of the scheduled payment dates and by midnight in hong kong. There had been no announcements by evergrande about thursday's payment and therefore, it really does seem like the chinese government is potentially going to be bailing out the onshore bonds, but not the offshore institutional bonds.

I think this will have a massive impact on u.s and uk markets, and even european markets as well guys be sure to. Let me know down in the comments below what you think about the secret conversation between vlad and ken griffin and about citadel being in a total mess and also, while you're down there be sure to remember, to sign up to blockfide to get up to 250. In free bitcoin, and as always guys, if you enjoyed this video, be sure to check out some of my others. Alternatively, subscribe to the channel and ding that notification bell, because that way, you'll be alerted.

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