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Nebraska Regulatory Action

Nebraska Department of Banking and Finance, Securities Bureau: What Nebraska Financial Regulators Should Do About Citadel

The Nebraska Department of Banking and Finance, Bureau of Securities has jurisdiction to investigate Citadel Securities' payment for order flow practices affecting an estimated 340,000 Nebraska retail investors. Here is what state regulators should do — and why.

The Nebraska Department of Banking and Finance, Securities Bureau's Authority

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.

The Harm Requiring Regulatory Response

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

What State Regulators Should Do

The Nebraska Department of Banking and Finance, Bureau of Securities, in coordination with the Nebraska Attorney General's office, should:

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

Contacting the Nebraska Department of Banking and Finance, Securities Bureau

Nebraska investors and advocates can contact the Nebraska Department of Banking and Finance, Bureau of Securities at https://banking.nebraska.gov/securities to report concerns and request regulatory action on PFOF practices affecting Nebraska residents.

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