Minnesota Investor Alert

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

How PFOF Affects Minnesota Investors

Minnesota has a large financial services sector and significant retail investor population. Minneapolis is home to major financial institutions, and Minnesota investors face the same PFOF-driven conflicts as investors nationwide.

The Scale in Minnesota

Minnesota has an estimated 1 million Minnesota 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.

Minnesota's financial hub in Minneapolis has sophisticated financial professionals who understand these dynamics. But most Minnesota retail investors — those in St. Paul, Rochester 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 Minnesota

Kenneth Griffin has given contributions through national Republican organizations that fund Minnesota candidates. His key recipients include national Republican committees that have invested in competitive Minnesota Senate races. 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 Minnesota.

National Republican Senatorial Committee — $1,000,000 (2020, Federal Super PAC)

What Minnesota Regulators Could Do

Minnesota Attorney General Keith Ellison has been among the most aggressive state AGs on corporate accountability and could lead a multistate PFOF investigation. The Minnesota Department of Commerce has securities enforcement authority under Minn. Stat. §80A.01 et seq.

What Minnesota Investors Can Do Now

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

File a complaint with the Minnesota Department of Commerce, Securities Division at https://mn.gov/commerce/industries/securities
File a complaint with the Minnesota Attorney General at https://www.ag.state.mn.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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