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March 23, 2021

CNBC Posts Edited Video from House Financial Services’ GameStop Hearing, Deleting Dennis Kelleher’s Key Testimony Criticizing Citadel

FOR IMMEDIATE RELEASE

Tuesday, March 23, 2021

Contact: Pamela Russell at 202-618-6433 or prussell@bettermarkets.com

CNBC Posts Edited Video from House Financial Services’ GameStop Hearing,

Deleting Dennis Kelleher’s Key Testimony Criticizing Citadel

Washington, D.C.  –  Dennis M. Kelleher, President and Chief Executive Officer of Better Markets, issued the following statement in response to revelations that CNBC omitted one key part of the recent U.S. House Financial Services Committee (HFSC) hearing on GameStop and related issues. CNBC’s deleted footage included Kelleher’s call for the Financial Stability Oversight Council (FSOC) to examine whether to designate Citadel Securities (Citadel) as systemically important, given the firm’s substantial presence throughout the U.S. equities and options markets. Such a designation, if made, would subject Citadel to substantial additional regulatory scrutiny.

A side-by-side comparison of CNBC’s incomplete version of the hearing and the official complete version released by the U.S. House Financial Services Committee confirms this deletion: Compare the video posted by HFSC (includes Kelleher’s full comments on the need to carefully scrutinize Citadel) with the video posted by CNBC (which abruptly cuts off Kelleher’s comments and inexplicably jumps ahead approximately 10 minutes).

“CNBC always rolls out the welcome mat for Citadel and its founder Ken Griffin, but rarely, if ever, is any criticism of them ever allowed on CNBC. That is not by accident; that is an editorial decision to only present one side of these key issues facing the country related to our financial markets and the economy. We do not know if that is the reason CNBC posted an edited version of the video of the House Financial Services Committee’s March 17 GameStop hearing or if it is a remarkable coincidence. We do know that, out of more than four hours of the hearing, CNBC deleted a part in the middle of the hearing that included the most direct, pointed criticism of Citadel.

“Specifically, I testified that FSOC should review Citadel’s wide-ranging activities in the financial markets to determine if it should be designated and regulated as a systemically significant nonbank. Citadel is a gigantic, interconnected financial firm, but it is non-transparent and unregulated in critical respects, preventing effective oversight and accountability. That’s why it is vital for Main Street Americans and retail investors to know whether or not it is a systemically significant firm, whether it poses a threat to the financial system and economy, and whether it should be regulated more comprehensively. CNBC’s viewers, however, would not know those critical issues were pointedly discussed at the hearing or deleted from the video CNBC posted. CNBC should immediately restore the deleted parts of the video.”

To hear Kelleher’s concerns about Citadel’s substantial presence in the financial markets without the regulatory oversight necessary to protect investors and markets, visit this link. However, Kelleher’s following comments, directly responding to a Republican witness’s unqualified defense of Citadel, during the hearing capture the essence of his concerns:

“If Citadel shut down today, even for a day, that means 26 percent of all U.S. equities’ volume in 8,900 listed securities would stop. It executes 47 percent of all U.S. listed retail volume. It represents 99 percent of the traded volume of 3,000 listed options. To say that the system would work perfectly fine if all that evaporated today and competitors would come into the market—that may ultimately happen—but until it ultimately happens, you’re going to have a systemic event. And to deny that is to deny reality.”

Here is the official recording from HFSC, and here is the recording posted by CNBC. For more information on Citadel, refer to this Better Markets’ Citadel Fact Sheet and this Payment For Order Flow Fact Sheet.

Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.com.

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