North Carolina Investor Alert

Citadel Securities and North Carolina 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 2 million North Carolina retail investors. Here is what North Carolina residents need to know.

How PFOF Affects North Carolina Investors

Charlotte is America's second-largest banking center. North Carolina retail investors are served by major banks and discount brokers, all of which route orders to Citadel Securities. The state's significant Black and Latino retail investor population deserves equal protection from undisclosed PFOF harms.

The Scale in North Carolina

North Carolina has an estimated 2 million North Carolina 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.

North Carolina's financial hub in Charlotte has sophisticated financial professionals who understand these dynamics. But most North Carolina retail investors — those in Raleigh, Durham 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 North Carolina

Kenneth Griffin has given more than $5 million in North Carolina-linked political contributions. His key recipients include Senator Thom Tillis 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 North Carolina.

Thom Tillis (R-NC Senate) — $50,000 (2020, U.S. Senate)
Republican Governors Association — $5,000,000 (2022, Federal Super PAC)

What North Carolina Regulators Could Do

North Carolina Attorney General Jeff Jackson and the NC Securities Division have authority under the North Carolina Securities Act (G.S. Chapter 78A) to investigate broker-dealer conflicts affecting state residents.

What North Carolina Investors Can Do Now

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

File a complaint with the North Carolina Secretary of State, Securities Division at https://www.sosnc.gov/divisions/securities
File a complaint with the North Carolina Attorney General at https://www.ncdoj.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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