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Missouri Regulatory Action

Missouri Secretary of State, Securities Division: What Missouri Financial Regulators Should Do About Citadel

The Missouri Secretary of State, Securities Division has jurisdiction to investigate Citadel Securities' payment for order flow practices affecting an estimated 1.1 million Missouri retail investors. Here is what state regulators should do — and why.

The Missouri Secretary of State, Securities Division's Authority

Missouri Attorney General Andrew Bailey and the Missouri Securities Division have authority under the Missouri Securities Act of 2003 (RSMo §409.1-101 et seq.) to investigate market maker conflicts.

The Harm Requiring Regulatory Response

Missouri retail investors in St. Louis and Kansas City financial centers face the same PFOF-driven conflicts as national investors, with limited state regulatory enforcement.

What State Regulators Should Do

The Missouri Secretary of State, Securities Division, in coordination with the Missouri Attorney General's office, should:

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

Contacting the Missouri Secretary of State, Securities Division

Missouri investors and advocates can contact the Missouri Secretary of State, Securities Division at https://www.sos.mo.gov/securities to report concerns and request regulatory action on PFOF practices affecting Missouri residents.

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