How PFOF Affects Illinois Investors
Illinois is Citadel Securities' historical home. Every Illinois retail investor's trade at a discount broker likely flows through a company that has spent tens of millions shaping Illinois politics. The regulatory capture concern is most acute here: Illinois politicians who received Griffin's money have had little incentive to scrutinize Citadel's practices.
The Scale in Illinois
Illinois has an estimated 2.8 million Illinois retail investors — the state with the most direct connection to Citadel's headquarters. 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.
Illinois's financial hub in Chicago has sophisticated financial professionals who understand these dynamics. But most Illinois retail investors — those in Naperville, Rockford 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 Illinois
Kenneth Griffin has given more than $100 million in Illinois-linked and national political donations over the past decade — making Griffin one of the most consequential political donors in Illinois history. His key recipients include Governor Bruce Rauner (to whom Griffin gave $27.6 million in 2014, the largest single donation in Illinois history at the time), the Illinois Republican Party, and national super PACs. 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 Illinois.
- Bruce Rauner (R-IL Governor) — $27,600,000 (2014, Illinois Governor)Historic amount — enabled Rauner's upset of incumbent Pat Quinn
- Bruce Rauner (R-IL Governor) — $20,000,000+ (2018, Illinois Governor re-election)
- Illinois Republican Party — $2,000,000+ (2018-2022, State party)
- Preserve America PAC (DeSantis) — $50,000,000 (2022, Federal Super PAC)
What Illinois Regulators Could Do
Illinois Attorney General Kwame Raoul could investigate PFOF practices under the Illinois Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/) and the Illinois Securities Law of 1953. The Attorney General's office has historically been aggressive on financial consumer protection — the question is whether Griffin's political influence has created a chilling effect.
What Illinois Investors Can Do Now
Illinois retail investors who believe they have been harmed by PFOF-driven execution quality degradation can take several steps:
- File a complaint with the Illinois Secretary of State, Securities Department at https://www.ilsos.gov/departments/securities
- File a complaint with the Illinois Attorney General at https://illinoisattorneygeneral.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