How PFOF Affects New Jersey Investors
New Jersey is home to some of the nation's most sophisticated retail investors — many employed in Wall Street-adjacent industries across the Hudson. These investors deserve better than the opaque PFOF arrangements that benefit Citadel at their expense.
The Scale in New Jersey
New Jersey has an estimated 1.9 million New Jersey retail investors — in the nation's wealthiest state per capita. 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.
New Jersey's financial hub in Newark has sophisticated financial professionals who understand these dynamics. But most New Jersey retail investors — those in Jersey City, Hoboken 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 New Jersey
Kenneth Griffin has given millions through national Republican organizations that target competitive New Jersey races. His key recipients include national Republican committees with New Jersey political operations. 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 New Jersey.
- National Republican Senatorial Committee — $1,000,000 (2022, Federal Super PAC)
- Republican National Committee — $1,500,000 (2022, Federal Committee)
What New Jersey Regulators Could Do
New Jersey Attorney General Matthew Platkin has been active on financial consumer protection. The New Jersey Bureau of Securities has authority under the New Jersey Uniform Securities Law (N.J.S.A. 49:3-47 et seq.) to investigate market maker conflicts.
What New Jersey Investors Can Do Now
New Jersey retail investors who believe they have been harmed by PFOF-driven execution quality degradation can take several steps:
- File a complaint with the New Jersey Bureau of Securities at https://www.njconsumeraffairs.gov/bos
- File a complaint with the New Jersey Attorney General at https://www.njoag.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