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Nevada Regulatory Action

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

The Nevada Secretary of State, Securities Division has jurisdiction to investigate Citadel Securities' payment for order flow practices affecting an estimated 600,000 Nevada retail investors. Here is what state regulators should do — and why.

The Nevada Secretary of State, Securities Division's Authority

Nevada Attorney General Aaron Ford and the Nevada Secretary of State's Securities Division have authority under the Nevada Uniform Securities Act (NRS Chapter 90) to investigate broker-dealer conflicts.

The Harm Requiring Regulatory Response

Nevada's gaming and hospitality workers hold significant retirement savings through discount brokers. The state's large immigrant and working-class population has limited financial literacy resources to understand PFOF practices.

What State Regulators Should Do

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

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

Contacting the Nevada Secretary of State, Securities Division

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

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