THE ETHICS REPORTER

← Citadel Securities Investigation
Arkansas Investor Alert

Citadel Securities and Arkansas 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 500,000 Arkansas retail investors. Here is what Arkansas residents need to know.

How PFOF Affects Arkansas Investors

Arkansas retail investors, many of them rural and reliant on mobile trading apps, face undisclosed costs embedded in Citadel's market-making spread. The lack of best-execution enforcement means Arkansas investors have no practical recourse.

The Scale in Arkansas

Arkansas has an estimated 500,000 Arkansas 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.

Arkansas's financial hub in Little Rock has sophisticated financial professionals who understand these dynamics. But most Arkansas retail investors — those in Fayetteville, Fort Smith 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 Arkansas

Kenneth Griffin has given millions through national Republican super PACs that support Arkansas's federal delegation. His key recipients include Senator Tom Cotton and national Republican committees that fund Arkansas candidates. 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 Arkansas.

  • Tom Cotton (R-AR Senate) — $10,000 (2020, U.S. Senate)
  • Republican Senate Leadership Fund — $2,000,000 (2022, Federal Super PAC)

What Arkansas Regulators Could Do

Arkansas Attorney General Tim Griffin and the Arkansas Securities Department have jurisdiction under the Arkansas Securities Act (A.C.A. §23-42-101 et seq.) to investigate broker-dealer practices affecting state residents.

What Arkansas Investors Can Do Now

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

Related Coverage

Support Independent Accountability Journalism

The Ethics Reporter is the only independent news organization systematically tracking how Kenneth Griffin's political spending relates to the regulatory environment that protects Citadel Securities' business model. This reporting serves retail investors across every state in the country.

We are reader-funded and accept no money from financial industry advertisers. If this reporting is valuable — if you believe retail investors deserve transparency about who controls their trades — please support us.

Reader Supported

This journalism is free because readers like you make it possible.

We don't have corporate advertisers. We don't take money from law firms. Every investigation you read here is funded entirely by readers. Even $1 keeps us going.

Join 47 readers who donated this month

47% toward our monthly goal of 100 supporters

Secure checkout via Stripe. Cancel your monthly gift anytime.

← Back to Citadel Investigation Hub