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Georgia Regulatory Action

Georgia Secretary of State, Securities Division: What Georgia Financial Regulators Should Do About Citadel

The Georgia Secretary of State, Securities and Charities Division has jurisdiction to investigate Citadel Securities' payment for order flow practices affecting an estimated 2 million Georgia retail investors. Here is what state regulators should do — and why.

The Georgia Secretary of State, Securities Division's Authority

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.

The Harm Requiring Regulatory Response

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.

What State Regulators Should Do

The Georgia Secretary of State, Securities and Charities Division, in coordination with the Georgia Attorney General's office, should:

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

Contacting the Georgia Secretary of State, Securities Division

Georgia investors and advocates can contact the Georgia Secretary of State, Securities and Charities Division at https://sos.ga.gov/securities to report concerns and request regulatory action on PFOF practices affecting Georgia residents.

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