In November 2021, German BaFin issued the first warning against Citadel LLC and PenteTrade24, banning the public sale of shares of the bankrupt Swiss Cannabis Health AG via the meanwhile suspended website Citadel Securities (https://citadelsecurities.center). A second BaFin warning followed on 6 Jan 2022. While the US-registered Pente Management LLC operates the online retail broker PenteTrade24 (www.pente24.com), Citadel LLC is the well-known Chicago-based hedge fund of U.S. billionaire Kenneth C. Griffin; Citadel Securities is their brokerage and trading arm.
Key Data
| Business | Hedge fund, retail brokerage |
| Brands | Citadel, Citadel Securities, Pente24, PenteTrade24, TraderDesk, Users Portal ATFX, ATFX Users Portal 24 |
| Domains | www.citadelsecurities.center, www.pente24.com, www.pente24.net, https://atfx.traderdesk.net, https://users-portal.com |
| Related entities | Citadel LLC, Pente Management LLC |
| Related indivU.S.uals | Paul M. Schrank (U.S.), Kurt L. Mueller, Eric Whitehead, Peter J. Biscardy, Jeremy R. Santaguida |
| Related shares | Cannabis Health AG (Swiss) d/b/a WeCanHealth |
The Narrative
The interesting thing about this case is that the Swiss-Macedonian joint venture Cannabis Health AG was already in bankruptcy when BaFin first issued its warning in Nov 2021; the company’s website has been offline for some time, and the domain www.wecanhealth.ch is available for purchase. In the summer of 2019, OTC trading in the penny stock started. From March 2020 until the bankruptcy, the company’s shares were traded on the blockchain exchange BEX. At its peak, the penny stock was traded at more than CHF 13. Before the company went bankrupt and disappeared.
According to BaFin, Citadel LLC and PenteTrade24 acted as brokers for Cannabis Health AG, selling their shares to retail investors online and through boiler room agents without regulatory permission. PenteTrade24 a/k/a Pente24, an unauthorized retail broker apparently focuses on German-speaking customers. It not only sold the Cannabis Health penny stock illegally but was or is acting as an illegal broker under the brand ATFX, which is a clone of the CySEC-regulated ATFX Global Markets (CY) Ltd.
PenteTrade24 operates as Citadel Securities. How and if they are connected to the Chicago-based hedge fund Citadel LLC of billionaire Kenneth C. Griffin and its brokerage arm Citadel Securities is currently not known. They may or may not collude in this case. A Reddit post outlines that this Citadel is involved in meme stocks and short-selling via a variety of online retail platforms to this end.
PenteTrade24 could be one of these retail platforms. In addition, Citadel Securities is said to have been a market maker in Cannabis Health penny stock. China banned Citadel Securities for 4 years in 2015 for its business practices. It was not until 2020 that Citadel Securities was allowed to operate in China again after paying nearly $98 million, Wall Street Journal reports.
Involved platforms
PenteTrade24 operates the online medium UsersPortal (https://users-portal.com) which is filled with “lorem ipsum” and test articles. Via the email address [email protected], potential victims are referred to the TraderDesk users portal. The Users Portal was active at the time of today’s review on January 8, 2022. Until our first report, clients, who wanted to register with PenteTrader24 have been redirected to the Citadel Securities website (https://citadelsecurities.center). The hoster has suspended the website since then.
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If you have information about the Cannabis Health case, Citadel, or PentaTrade42, please share it with us through our whistleblower system, Whistle42.
