THE ETHICS REPORTER

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Ohio Investor Alert

Citadel Securities and Ohio 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 2.2 million Ohio retail investors. Here is what Ohio residents need to know.

How PFOF Affects Ohio Investors

Ohio's manufacturing-heavy economy has a large workforce with significant retirement savings. Ohio retail investors — from auto workers in Toledo to tech workers in Columbus — route trades through PFOF-dependent brokers without disclosure.

The Scale in Ohio

Ohio has an estimated 2.2 million Ohio 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.

Ohio's financial hub in Columbus has sophisticated financial professionals who understand these dynamics. But most Ohio retail investors — those in Cleveland, Cincinnati 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 Ohio

Kenneth Griffin has given millions in Ohio-linked political contributions. His key recipients include Senator Rob Portman and the NRSC that invested in Ohio's 2022 Senate race. 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 Ohio.

  • Rob Portman (R-OH Senate) — $25,000 (2022, U.S. Senate)
  • National Republican Senatorial Committee — $1,000,000 (2022, Federal Super PAC)

What Ohio Regulators Could Do

Ohio Attorney General Dave Yost has been an active consumer protection advocate. The Ohio Division of Securities has authority under the Ohio Securities Act (O.R.C. Chapter 1707) to investigate market maker conflicts affecting Ohio investors.

What Ohio Investors Can Do Now

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

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