How PFOF Affects Maryland Investors
Maryland's proximity to Washington means many federal government employees and contractors rely on discount brokers for retirement savings — all subject to PFOF arrangements that fund a company engaged in extensive political giving.
The Scale in Maryland
Maryland has an estimated 1.2 million Maryland retail investors — with a highly educated, high-income population near Washington DC. 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.
Maryland's financial hub in Baltimore has sophisticated financial professionals who understand these dynamics. But most Maryland retail investors — those in Bethesda, Rockville 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 Maryland
Kenneth Griffin has given more than $5 million tied to Maryland's political establishment. His key recipients include Governor Larry Hogan and the Republican Governors Association that supported his administration. 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 Maryland.
- Larry Hogan (R-MD Governor) — $150,000 (2022, Maryland Governor)
- Republican Governors Association — $5,000,000 (2022, Federal Super PAC)
What Maryland Regulators Could Do
Maryland Attorney General Anthony Brown, whose office directly houses the Securities Division, has both jurisdiction and political motivation to investigate PFOF abuses under the Maryland Securities Act (Corporations and Associations Article, §11-101 et seq.).
What Maryland Investors Can Do Now
Maryland retail investors who believe they have been harmed by PFOF-driven execution quality degradation can take several steps:
- File a complaint with the Maryland Office of the Attorney General, Securities Division at https://www.marylandattorneygeneral.gov/Pages/Securities/default.aspx
- File a complaint with the Maryland Attorney General at https://www.marylandattorneygeneral.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