What the Epstein DOJ Files Say About Ken Griffin and Citadel
DOJ Epstein Disclosure File Referencing Ken Griffin, Citadel Securities, and Market Structure Claims
A recently resurfaced document from the U.S. Department of Justice’s Epstein disclosure archive contains a lengthy set of emails and attachments that repeatedly reference Ken Griffin and Citadel Securities, raising serious questions about U.S. market structure, regulatory oversight, and the persistence of naked short selling.
The file, identified as EFTA00097262, is not a court ruling or enforcement action. It consists primarily of correspondence from a self-identified SEC whistleblower sent to federal judges, regulators, and enforcement officials. What follows is a summary of what the file itself states.
Congressional Testimony and Naked Short Selling
According to the file, Ken Griffin told members of Congress during House Financial Services Committee testimony that the SEC had eliminated illegal naked short selling long ago through Regulation SHO.
The author of the file states that this claim is false and that mechanisms still exist that allow market participants to sell shares without borrowing or locating them. The document repeatedly asserts that regulators are aware of this and that the public has been misled about the true state of enforcement.
Citadel’s Clearing Structure
According to the file, Citadel maintains a deliberate distinction between how its internal hedge funds and its market-making arm handle clearing.
The file states that Citadel’s internal funds self-clear, while Citadel Securities does not. Instead, Citadel Securities clears trades through large third-party clearing firms, including major custodial banks.
The document claims this structure exists to prevent liabilities from appearing directly on Citadel Securities’ balance sheet and to avoid exposing Ken Griffin personally to insolvency or accounting risk that could arise from self-clearing activity.
OTC Markets and Internalization
According to the file, Citadel is one of the dominant traders in OTC Markets and internalized order flow, particularly in thinly traded securities.
The document states that Citadel and similar firms generate profits by repeatedly selling shares into demand without covering positions, especially in microcap and OTC securities. The file claims that trading volumes attributed to these firms exceed total available share counts, which the author says can only occur if shares are sold without being borrowed.
Fails-to-Deliver and the Obligation Warehouse
According to the file, the DTCC’s Obligation Warehouse plays a central role in masking the true scale of fails-to-deliver.
The document states that this system allows unsettled trades to persist outside normal clearing processes, effectively bypassing Regulation SHO close-out requirements. The file asserts that regulators have full visibility into these positions but do not require public disclosure.
Regulatory Oversight
According to the file, the SEC and FINRA have been aware of these practices for years and have declined to pursue meaningful enforcement.
The document states that regulatory actions focus on small, peripheral cases while systemic market-making activity remains untouched. It further claims that whistleblower submissions detailing these practices were used selectively while core market participants were protected.
Why the File Matters
The Epstein DOJ files do not present verdicts or enforcement outcomes. They present a record preserved by the federal government of repeated warnings sent to regulators and courts.
According to the file, if these practices were fully disclosed, they would fundamentally challenge public claims about market fairness, price discovery, and investor protection.
The document leaves readers with one central question:
If the system is as transparent and well-regulated as advertised, why does this file exist at all?
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