THE ETHICS REPORTER

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Arizona State Action

Arizona Attorney General Kris Mayes: The Case for Investigating Citadel Securities

Kris Mayes, the Arizona Attorney General, has the authority and — given the documented harms to an estimated 1.3 million Arizona retail investors — the obligation to investigate Citadel Securities' payment for order flow practices under Arizona law.

The AG's Authority in Arizona

Arizona Attorney General Kris Mayes has shown willingness to pursue corporate accountability and could lead or join a multistate PFOF investigation. The Arizona Corporation Commission's Securities Division has independent authority to examine broker-dealer conflicts under A.R.S. §44-1961.

The Harm to Arizona Investors

Arizona has a large retiree population in the Sun Belt—many of whom are active retail investors managing IRA and 401(k) assets through discount brokers. PFOF practices mean these investors subsidize Citadel Securities' profits on every trade.

Kris Mayes has an estimated 1.3 million Arizona retail investors as potential complainants. This is not an abstract regulatory question — it is a matter of whether Arizona's chief law enforcement officer will protect the financial interests of Arizona residents when federal regulators have failed to act.

The Griffin Political Context

Arizona Attorney General Kris Mayes should be aware of the documented political investment Kenneth Griffin has made in Arizona. Griffin has given more than $2.5 million to Arizona-linked political recipients to Blake Masters' Senate campaign and the Republican Senate Leadership Fund that targeted Arizona. This political context does not determine what the AG should do — but it is relevant to understanding why federal and state regulators have been slow to act, and why an independent state investigation would be meaningful.

What the AG Should Investigate

  • Whether PFOF arrangements between major discount brokers and Citadel Securities violate Arizona consumer protection law by creating undisclosed conflicts of interest
  • Whether Arizona broker-dealers are meeting best execution obligations under state securities law
  • Whether Citadel Securities' disclosures to Arizona retail investors adequately describe the PFOF relationship
  • Whether a multistate investigation coordinated through NASAA would be appropriate

Contact Kris Mayes

Arizona residents can contact the Attorney General's office at https://www.azag.gov to request investigation of PFOF-related broker-dealer practices affecting Arizona investors.

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