The Maryland Office of the Attorney General, Securities Division's Authority
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.).
The Harm Requiring Regulatory Response
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.
What State Regulators Should Do
The Maryland Office of the Attorney General, Securities Division, in coordination with the Maryland Attorney General's office, should:
- Open an investigation into whether broker-dealers serving Maryland 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 Maryland residents
- Contact NASAA to explore multistate coordination
- Issue investor education guidance about PFOF practices and how Maryland investors can protect themselves
- Consider rulemaking under state securities law to require enhanced disclosure of PFOF arrangements affecting Maryland retail investors
Contacting the Maryland Office of the Attorney General, Securities Division
Maryland investors and advocates can contact the Maryland Office of the Attorney General, Securities Division at https://www.marylandattorneygeneral.gov/Pages/Securities/default.aspx to report concerns and request regulatory action on PFOF practices affecting Maryland residents.