Vanguard Gives Orders To Citadel

Vanguard Colludes With Citadel To Drain Investor Liquidity

How often can Citadel take Vanguard orders into the dark pool?

Citadel can route Vanguard client orders into dark pools, but the exact frequency is not publicly disclosed. Vanguard uses multiple market makers and prioritizes best execution, which may include dark pool venues like Citadel Connect.

🕳️ What Are Dark Pools?

• Dark pools are private trading venues where large orders can be executed anonymously, minimizing market impact.
• They’re often used by institutional investors to avoid slippage and front-running.
• Citadel Connect is Citadel’s proprietary dark pool, one of the most active in the U.S.

🔁 Vanguard’s Routing Practices

• Vanguard Brokerage Services routes trades to external market makers, including Citadel Securities.
• According to SEC Rule 606 disclosures, Vanguard evaluates execution quality across venues, which may include dark pools.
• Vanguard does not publish how often Citadel routes its orders into dark pools like Citadel Connect.

📊 What We Know from Disclosures

• Citadel Securities has been fined for mismarking short sales and has faced scrutiny over its dark pool practices.
• Vanguard’s Rule 606 reports show Citadel receives a significant portion of its order flow, but do not specify how much ends up in dark pools.
• Retail trades routed through Citadel may be internally matched or sent to dark pools depending on liquidity and pricing.

🔍 Transparency Challenges

• No public breakdown exists showing how many Vanguard orders go into Citadel’s dark pool versus lit exchanges.
• Retail investors have raised concerns on Reddit and forums like r/Superstonk and r/wallstreetbets about the opacity of dark pool routing.

🧠 Bottom Line

While Citadel can route Vanguard orders into its dark pool, the frequency and conditions are not disclosed. Vanguard’s priority is best execution, which may involve dark pools if they offer better pricing or liquidity.