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Colorado Regulatory Action

Colorado Division of Securities: What Colorado Financial Regulators Should Do About Citadel

The Colorado Division of Securities, Department of Regulatory Agencies has jurisdiction to investigate Citadel Securities' payment for order flow practices affecting an estimated 1 million Colorado retail investors. Here is what state regulators should do — and why.

The Colorado Division of Securities's Authority

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.).

The Harm Requiring Regulatory Response

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.

What State Regulators Should Do

The Colorado Division of Securities, Department of Regulatory Agencies, in coordination with the Colorado Attorney General's office, should:

  • Open an investigation into whether broker-dealers serving Colorado 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 Colorado residents
  • Contact NASAA to explore multistate coordination
  • Issue investor education guidance about PFOF practices and how Colorado investors can protect themselves
  • Consider rulemaking under state securities law to require enhanced disclosure of PFOF arrangements affecting Colorado retail investors

Contacting the Colorado Division of Securities

Colorado investors and advocates can contact the Colorado Division of Securities, Department of Regulatory Agencies at https://www.sos.state.co.us/securities to report concerns and request regulatory action on PFOF practices affecting Colorado residents.

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