THE ETHICS REPORTER

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Oklahoma Investor Alert

Citadel Securities and Oklahoma 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 650,000 Oklahoma retail investors. Here is what Oklahoma residents need to know.

How PFOF Affects Oklahoma Investors

Oklahoma's energy sector workers and small businesses hold retirement savings through discount brokers subject to PFOF practices. The state has limited financial consumer protection infrastructure.

The Scale in Oklahoma

Oklahoma has an estimated 650,000 Oklahoma 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.

Oklahoma's financial hub in Oklahoma City has sophisticated financial professionals who understand these dynamics. But most Oklahoma retail investors — those in Tulsa, Norman 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 Oklahoma

Kenneth Griffin has given contributions through national Republican organizations. His key recipients include national Republican committees that fund Oklahoma's federal delegation. 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 Oklahoma.

  • Republican National Committee — $1,500,000 (2022, Federal Committee)

What Oklahoma Regulators Could Do

Oklahoma Attorney General Gentner Drummond and the Oklahoma Department of Securities have authority under the Oklahoma Uniform Securities Act (71 O.S. §1-101 et seq.) to investigate broker-dealer conflicts.

What Oklahoma Investors Can Do Now

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

  • File a complaint with the Oklahoma Department of Securities at https://www.securities.ok.gov
  • File a complaint with the Oklahoma Attorney General at https://www.oag.ok.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

Related Coverage

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