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Ohio Regulatory Action

Ohio Division of Securities: What Ohio Financial Regulators Should Do About Citadel

The Ohio Division of Securities, Department of Commerce has jurisdiction to investigate Citadel Securities' payment for order flow practices affecting an estimated 2.2 million Ohio retail investors. Here is what state regulators should do — and why.

The Ohio Division of Securities's Authority

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.

The Harm Requiring Regulatory Response

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.

What State Regulators Should Do

The Ohio Division of Securities, Department of Commerce, in coordination with the Ohio Attorney General's office, should:

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

Contacting the Ohio Division of Securities

Ohio investors and advocates can contact the Ohio Division of Securities, Department of Commerce at https://www.com.ohio.gov/securities to report concerns and request regulatory action on PFOF practices affecting Ohio residents.

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