THE ETHICS REPORTER

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Colorado Investor Alert

Citadel Securities and Colorado 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 million Colorado retail investors. Here is what Colorado residents need to know.

How PFOF Affects Colorado Investors

Colorado has a highly educated, tech-savvy investor population with significant 401(k) and IRA assets managed through discount brokers. PFOF practices affect this sophisticated but underserved investor community.

The Scale in Colorado

Colorado has an estimated 1 million Colorado 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.

Colorado's financial hub in Denver has sophisticated financial professionals who understand these dynamics. But most Colorado retail investors — those in Boulder, Colorado Springs 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 Colorado

Kenneth Griffin has given millions through national Republican committees that target competitive Colorado races. His key recipients include national Republican Senate and gubernatorial committees that fund Colorado 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 Colorado.

  • Republican Governors Association — $500,000 (2022, Federal Super PAC)
  • National Republican Senatorial Committee — $1,000,000 (2022, Federal Super PAC)

What Colorado Regulators Could Do

Colorado Attorney General Phil Weiser has been an aggressive consumer-protection advocate and could pursue Citadel-related PFOF claims under the Colorado Consumer Protection Act (C.R.S. §6-1-101 et seq.).

What Colorado Investors Can Do Now

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

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