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Minnesota Regulatory Action

Minnesota Department of Commerce, Securities Division: What Minnesota Financial Regulators Should Do About Citadel

The Minnesota Department of Commerce, Securities Division has jurisdiction to investigate Citadel Securities' payment for order flow practices affecting an estimated 1 million Minnesota retail investors. Here is what state regulators should do — and why.

The Minnesota Department of Commerce, Securities Division's Authority

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.

The Harm Requiring Regulatory Response

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.

What State Regulators Should Do

The Minnesota Department of Commerce, Securities Division, in coordination with the Minnesota Attorney General's office, should:

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

Contacting the Minnesota Department of Commerce, Securities Division

Minnesota investors and advocates can contact the Minnesota Department of Commerce, Securities Division at https://mn.gov/commerce/industries/securities to report concerns and request regulatory action on PFOF practices affecting Minnesota residents.

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