THE ETHICS REPORTER

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Georgia Investor Alert

Citadel Securities and Georgia 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 2 million Georgia retail investors. Here is what Georgia residents need to know.

How PFOF Affects Georgia Investors

Atlanta's growing tech and financial services sector has created a large population of retail investors. Georgia retail investors' orders are routed to Citadel Securities without their knowledge, generating revenues for a company whose CEO has donated directly to the governor overseeing state financial regulators.

The Scale in Georgia

Georgia has an estimated 2 million Georgia 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.

Georgia's financial hub in Atlanta has sophisticated financial professionals who understand these dynamics. But most Georgia retail investors — those in Savannah, Augusta 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 Georgia

Kenneth Griffin has given more than $5 million tied to Georgia's political establishment. His key recipients include Governor Brian Kemp and the Republican Governors Association, which heavily invested in Georgia's 2022 governor's race. 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 Georgia.

  • Brian Kemp (R-GA Governor) — $250,000 (2022, Georgia Governor)
  • Republican Governors Association — $5,000,000 (2022, Federal Super PAC)

What Georgia Regulators Could Do

Georgia Attorney General Chris Carr and the Georgia Secretary of State's Securities Division have authority under the Georgia Securities Act (O.C.G.A. §10-5-1 et seq.) to investigate broker-dealer conflicts affecting Georgia investors.

What Georgia Investors Can Do Now

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

  • File a complaint with the Georgia Secretary of State, Securities Division at https://sos.ga.gov/securities
  • File a complaint with the Georgia Attorney General at https://law.georgia.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

Related Coverage

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