Michigan Investor Alert

Citadel Securities and Michigan 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 1.8 million Michigan retail investors. Here is what Michigan residents need to know.

How PFOF Affects Michigan Investors

Michigan's auto industry workers and retirees hold significant pension and IRA assets routed through discount brokers. PFOF practices extract value from these working-class investors without disclosure.

The Scale in Michigan

Michigan has an estimated 1.8 million Michigan 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.

Michigan's financial hub in Detroit has sophisticated financial professionals who understand these dynamics. But most Michigan retail investors — those in Grand Rapids, Lansing 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 Michigan

Kenneth Griffin has given more than $5.5 million in contributions tied to Michigan's political establishment. His key recipients include Michigan gubernatorial candidate Tudor Dixon and the Republican Governors Association. 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 Michigan.

Republican Governors Association — $5,000,000 (2022, Federal Super PAC)
Tudor Dixon (R-MI Governor) — $500,000 (2022, Michigan Governor)

What Michigan Regulators Could Do

Michigan Attorney General Dana Nessel has been an active consumer protection advocate and could pursue PFOF claims under Michigan securities law (M.C.L. §451.2101 et seq.) and the Michigan Consumer Protection Act.

What Michigan Investors Can Do Now

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

File a complaint with the Michigan Department of Licensing and Regulatory Affairs at https://www.michigan.gov/lara/bureau-list/corporations-securities-commercial-licensing
File a complaint with the Michigan Attorney General at https://www.michigan.gov/ag
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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