THE ETHICS REPORTER

← Citadel Securities Investigation
Michigan Regulatory Action

Michigan Department of Licensing and Regulatory Affairs: What Michigan Financial Regulators Should Do About Citadel

The Michigan Department of Licensing and Regulatory Affairs, Securities and Audit Division has jurisdiction to investigate Citadel Securities' payment for order flow practices affecting an estimated 1.8 million Michigan retail investors. Here is what state regulators should do — and why.

The Michigan Department of Licensing and Regulatory Affairs's Authority

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.

The Harm Requiring Regulatory Response

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.

What State Regulators Should Do

The Michigan Department of Licensing and Regulatory Affairs, Securities and Audit Division, in coordination with the Michigan Attorney General's office, should:

  • Open an investigation into whether broker-dealers serving Michigan 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 Michigan residents
  • Contact NASAA to explore multistate coordination
  • Issue investor education guidance about PFOF practices and how Michigan investors can protect themselves
  • Consider rulemaking under state securities law to require enhanced disclosure of PFOF arrangements affecting Michigan retail investors

Contacting the Michigan Department of Licensing and Regulatory Affairs

Michigan investors and advocates can contact the Michigan Department of Licensing and Regulatory Affairs, Securities and Audit Division at https://www.michigan.gov/lara/bureau-list/corporations-securities-commercial-licensing to report concerns and request regulatory action on PFOF practices affecting Michigan residents.

Related Coverage

Support Independent Accountability Journalism

The Ethics Reporter is the only independent news organization systematically tracking how Kenneth Griffin's political spending relates to the regulatory environment that protects Citadel Securities' business model. This reporting serves retail investors across every state in the country.

We are reader-funded and accept no money from financial industry advertisers. If this reporting is valuable — if you believe retail investors deserve transparency about who controls their trades — please support us.

Reader Supported

This journalism is free because readers like you make it possible.

We don't have corporate advertisers. We don't take money from law firms. Every investigation you read here is funded entirely by readers. Even $1 keeps us going.

Join 47 readers who donated this month

47% toward our monthly goal of 100 supporters

Secure checkout via Stripe. Cancel your monthly gift anytime.

← Back to Citadel Investigation Hub