Financial Times has reported a person familiar with the situation as saying that the hedge fund has given up a three-year effort to build a business to compete with Goldman Sachs and other Wall Street banks.
Bloomberg has reported that Citadel was in talks with Paris-based Societe Generale bank, regarding the take over of a team of fixed-income salespeople and traders but no deal has been reached.
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Citadel founder Ken Griffin had established the bank to offer advice on mergers and acquisitions as well as engage in the securities issuance and trading activities conducted by traditional investment banks.
The fund group lost more than half the capital in its flagship funds, Kensington and Wellington during the financial crisis, which weakened the group, according to Financial Times.
The departure of several key executives including the heads of other divisions of the bank had further hindered attempts to build the business.
Citadel purchased natural-gas positions from hedge fund Amaranth Advisors, which lost $6.6bn in 2006.
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