Arizona Investor Alert

Citadel Securities and Arizona Investors: What You Need to Know

Payment for order flow — the practice by which Citadel Securities pays discount brokers for exclusive access to retail order flow — affects an estimated 1.3 million Arizona retail investors. Here is what Arizona residents need to know.

How PFOF Affects 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.

The Scale in Arizona

Arizona has an estimated 1.3 million Arizona retail investors. Each of these investors who uses a PFOF-dependent discount broker — Robinhood, TD Ameritrade, E*Trade, Charles Schwab, or Webull — is routing their orders to Citadel Securities without their knowledge or consent. Citadel captures a spread on each of these trades, generating revenue that flows back to Kenneth Griffin while providing retail investors with marginally inferior execution prices compared to what competitive exchange routing would provide.

Arizona's financial hub in Phoenix has sophisticated financial professionals who understand these dynamics. But most Arizona retail investors — those in Scottsdale, Tempe and throughout the state — are unaware that their "free" trades are funded by a practice that systematically extracts value from them.

Kenneth Griffin's Political Investment in Arizona

Kenneth Griffin has given more than $2.5 million to Arizona-linked political recipients. His key recipients include Blake Masters' Senate campaign and the Republican Senate Leadership Fund that targeted Arizona. This political investment creates a documented relationship between the CEO of America's dominant retail market maker and the political figures responsible for overseeing financial regulation in Arizona.

Blake Masters (R-AZ Senate) — $500,000 (2022, U.S. Senate)
Republican Senate Leadership Fund — $2,000,000 (2022, Federal Super PAC)

What Arizona Regulators Could Do

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.

What Arizona Investors Can Do Now

Arizona retail investors who believe they have been harmed by PFOF-driven execution quality degradation can take several steps:

File a complaint with the Arizona Corporation Commission Securities Division at https://www.azcc.gov/securities
File a complaint with the Arizona Attorney General at https://www.azag.gov
File a complaint with the SEC at sec.gov/tcr
File a complaint with FINRA at finra.org
Consider switching to a broker that does not use PFOF, such as Fidelity or Interactive Brokers direct routing

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