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Arkansas Regulatory Action

Arkansas Securities Department: What Arkansas Financial Regulators Should Do About Citadel

The Arkansas Securities Department has jurisdiction to investigate Citadel Securities' payment for order flow practices affecting an estimated 500,000 Arkansas retail investors. Here is what state regulators should do — and why.

The Arkansas Securities Department's Authority

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.

The Harm Requiring Regulatory Response

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.

What State Regulators Should Do

The Arkansas Securities Department, in coordination with the Arkansas Attorney General's office, should:

  • Open an investigation into whether broker-dealers serving Arkansas residents are meeting best execution obligations under state securities law
  • Issue a formal inquiry to major PFOF-dependent brokers about their routing arrangements with Citadel Securities and the execution quality they achieve for Arkansas residents
  • Contact NASAA to explore multistate coordination
  • Issue investor education guidance about PFOF practices and how Arkansas investors can protect themselves
  • Consider rulemaking under state securities law to require enhanced disclosure of PFOF arrangements affecting Arkansas retail investors

Contacting the Arkansas Securities Department

Arkansas investors and advocates can contact the Arkansas Securities Department at https://securities.arkansas.gov to report concerns and request regulatory action on PFOF practices affecting Arkansas residents.

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