Nebraska Investor Alert

Citadel Securities and Nebraska 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 340,000 Nebraska retail investors. Here is what Nebraska residents need to know.

How PFOF Affects Nebraska Investors

Omaha is home to major financial institutions and sophisticated investors — but retail investors statewide are subject to the same PFOF arrangements without disclosure.

The Scale in Nebraska

Nebraska has an estimated 340,000 Nebraska 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.

Nebraska's financial hub in Omaha has sophisticated financial professionals who understand these dynamics. But most Nebraska retail investors — those in Lincoln, Bellevue 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 Nebraska

Kenneth Griffin has given contributions to Nebraska's governor and national Republican organizations. His key recipients include former Governor Pete Ricketts (now U.S. Senator) and the Republican Governors Association. 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 Nebraska.

Pete Ricketts (R-NE Governor) — $25,000 (2018, Nebraska Governor)
Republican Governors Association — $500,000 (2022, Federal Super PAC)

What Nebraska Regulators Could Do

Nebraska Attorney General Mike Hilgers and the Nebraska Department of Banking and Finance have authority under the Nebraska Securities Act (Neb. Rev. Stat. §8-1101 et seq.) to investigate broker-dealer practices.

What Nebraska Investors Can Do Now

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

File a complaint with the Nebraska Department of Banking and Finance, Securities Bureau at https://banking.nebraska.gov/securities
File a complaint with the Nebraska Attorney General at https://ago.nebraska.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

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