The Securities and Exchange Commission is investigating Citadel Securities' handling of Slack's Initial Public Offering.

Citadel Securities is an electronic trading firm and Slack is a workplace messaging app. IPOs typically have banks as the underwriters. However, Slack went a different route where banks are brought on as financial advisors, but not as underwriters.

This is only a feasible possibility for companies that have large amounts of capital, because this method prevents companies from raising new capital. Citadel Securities was brought on as the designated market maker. On the trading floor, individuals working with Citadel Securities will announce a range of prices that they expect Slack’s stock to sell at. These price ranges are also known as initial indications.

Brokers on the trading floor the day of Slack’s IPO felt that the indications announced by Citadel Securities was too low. However, some say that having a lower indication in normal in the process.

“From our vantage point, we stand firmly behind the integrity and transparency of the listing and pricing process on this important transaction,” A Citadel Securities spokesman said.

Having low prices allows banks to give their clients a leg up by providing more accurate price listings.

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Economics, Finance and Investing