THE ETHICS REPORTER

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Montana Investor Alert

Citadel Securities and Montana 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 180,000 Montana retail investors. Here is what Montana residents need to know.

How PFOF Affects Montana Investors

Montana's rural retail investor population has limited access to financial advice and relies heavily on national discount brokers, all of which route orders through Citadel Securities.

The Scale in Montana

Montana has an estimated 180,000 Montana 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.

Montana's financial hub in Billings has sophisticated financial professionals who understand these dynamics. But most Montana retail investors — those in Missoula, Great Falls 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 Montana

Kenneth Griffin has given contributions through national Republican organizations. His key recipients include national Republican committees that fund Montana candidates. 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 Montana.

  • Republican Governors Association — $500,000 (2022, Federal Super PAC)

What Montana Regulators Could Do

Montana Attorney General Austin Knudsen and the Montana Commissioner of Securities and Insurance have jurisdiction under the Montana Securities Act (MCA §30-10-101 et seq.) to investigate broker-dealer conflicts.

What Montana Investors Can Do Now

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

  • File a complaint with the Montana Commissioner of Securities and Insurance at https://csi.mt.gov
  • File a complaint with the Montana Attorney General at https://dojmt.gov
  • 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

Related Coverage

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