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July 29, 2022

Today’s Court Win for the SEC Is a Big Win for Investors

Washington, D.C.  –   Stephen Hall, Legal Director and Securities Specialist for Better Markets, issued the following statement on the decision from the D.C. Circuit in the case of Citadel Securities LLC v. Securities and Exchange Commission:

“The Court has handed the SEC a complete and well-deserved win in a case that will make our trading markets more fair for all investors.  Every day, high frequency trading firms like Citadel siphon away investors’ money using their super-sophisticated, blink-of-an-eye trading systems to anticipate upcoming market moves and pick off investors’ orders at favorable prices.  They then turn around and immediately resell those shares at the improved price, pocketing billions of dollars in sure-fire profits.  Called ‘latency arbitrage,’ the practice moves money from the pockets of everyday investors to the coffers of the sophisticated professional traders who get to take full advantage of their ‘sneak peak’ into the market.

“It’s not fair, and that’s why IEX, an investor-friendly exchange, developed a new order type that helps neutralize the HFTs’ advantage.  When the market price is about to change, it reprices pending orders before HFT’s can strike, blunting their advantage.  But because so much easy money was at stake, Citadel was quick to challenge the SEC’s approval of the order in court.

“Fortunately, the Court was spot on, rejecting all of Citadel’s arguments and holding that the SEC’s decision was based on substantial evidence, was not unfair or arbitrary and capricious, and was properly explained.  The Court also appreciated what was at stake, as we explained in the amicus brief we filed in the case.  It’s really a double win.  It means that technological innovation like the IEX order type really can make life better for everyday investors—including countless retirement savers who must be able to rely on a fair market. It’s also a strong precedent, confirming that a well-reasoned and well-supported decision by the SEC can survive the almost inevitable legal challenges from the financial firms who stand to lose their unfair advantages and hence their undeserved out-sized profits.”



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

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