Louisiana Investor Alert

Citadel Securities and Louisiana 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 750,000 Louisiana retail investors. Here is what Louisiana residents need to know.

How PFOF Affects Louisiana Investors

Louisiana's oil and gas worker population has significant retirement savings managed through PFOF-dependent brokers. Post-Hurricane Katrina recovery investments and insurance payouts have also flowed into retail brokerage accounts.

The Scale in Louisiana

Louisiana has an estimated 750,000 Louisiana 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.

Louisiana's financial hub in New Orleans has sophisticated financial professionals who understand these dynamics. But most Louisiana retail investors — those in Baton Rouge, Shreveport 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 Louisiana

Kenneth Griffin has given millions through national Republican organizations that fund Louisiana candidates. His key recipients include Senator Bill Cassidy, a member of the Senate Finance Committee, and national Republican organizations. 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 Louisiana.

Bill Cassidy (R-LA Senate) — $25,000 (2022, U.S. Senate)
Republican National Committee — $1,500,000 (2022, Federal Committee)

What Louisiana Regulators Could Do

Louisiana Attorney General Liz Murrill and the Louisiana Office of Financial Institutions have authority under Louisiana securities law (R.S. 51:701 et seq.) to investigate market maker conflicts.

What Louisiana Investors Can Do Now

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

File a complaint with the Louisiana Office of Financial Institutions at https://www.ofi.la.gov
File a complaint with the Louisiana Attorney General at https://www.ag.state.la.us
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

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