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Private equity: Citadel cleans up on Wall Street

JPMorgan stopped counterparty trading with Citadel last month in protest at the $20 billion hedge fund’s recent hires of the bank’s staff. Employees at JPMorgan were told to stop trading stocks, bonds and currencies with Citadel. However, the dispute lasted only 24 hours. Both parties declined to comment but sources say relations between the two firms began to sour in March, when Patrik Edsparr left JPMorgan to run Europe and fixed income for Citadel. There have been several other hires from JPMorgan since that time, more lately Brian McDonald, formerly a managing director and senior portfolio manager with the US bank’s ABS Principal Investments Group. The final straw, though was the hire of Greg Boester, an adjustable-rate mortgage securities trader with the bank.

JPMorgan’s boycott was regarded by many as an unreasonable sulking fit. "Who does JPMorgan think it is?" says one hedge fund industry participant. "In this environment naturally employees will be looking to move to stable firms like Citadel rather than worry about their future in banks that have made big acquisitions." JPMorgan reportedly claims the hires have breached contractual agreements with Citadel.

Citadel has been hoovering up bank employees as an increasing number have become disgruntled with their employers or nervous about their salaries or future.

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