The AG's Authority in New York
New York Attorney General Letitia James has broad authority under the Martin Act — one of the most powerful state securities enforcement laws in the nation — to investigate PFOF practices without needing to prove intent to defraud. The New York DFS has independent regulatory authority over broker-dealers operating in the state. New York should lead a national investigation.
The Harm to New York Investors
New York is the center of American finance — and yet its retail investors are subject to the same PFOF practices that benefit a Chicago-based market maker. New York retail investors on Robinhood, E*Trade, TD Ameritrade, and other platforms generate billions in order flow for Citadel Securities annually.
Letitia James has an estimated 4.2 million New York retail investors — in the nation's financial capital as potential complainants. This is not an abstract regulatory question — it is a matter of whether New York's chief law enforcement officer will protect the financial interests of New York residents when federal regulators have failed to act.
The Griffin Political Context
New York Attorney General Letitia James should be aware of the documented political investment Kenneth Griffin has made in New York. Griffin has given millions through national Republican organizations that invest in New York congressional races to national Republican committees with New York operations. This political context does not determine what the AG should do — but it is relevant to understanding why federal and state regulators have been slow to act, and why an independent state investigation would be meaningful.
What the AG Should Investigate
- Whether PFOF arrangements between major discount brokers and Citadel Securities violate New York consumer protection law by creating undisclosed conflicts of interest
- Whether New York broker-dealers are meeting best execution obligations under state securities law
- Whether Citadel Securities' disclosures to New York retail investors adequately describe the PFOF relationship
- Whether a multistate investigation coordinated through NASAA would be appropriate
Contact Letitia James
New York residents can contact the Attorney General's office at https://ag.ny.gov to request investigation of PFOF-related broker-dealer practices affecting New York investors.