THE ETHICS REPORTER

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Oregon Investor Alert

Citadel Securities and Oregon 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 780,000 Oregon retail investors. Here is what Oregon residents need to know.

How PFOF Affects Oregon Investors

Oregon's tech and progressive community includes many retail investors who believe they are using 'zero-commission' trading — without understanding the PFOF model that funds Citadel Securities through their order flow.

The Scale in Oregon

Oregon has an estimated 780,000 Oregon 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.

Oregon's financial hub in Portland has sophisticated financial professionals who understand these dynamics. But most Oregon retail investors — those in Eugene, Salem 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 Oregon

Kenneth Griffin has given contributions through national Republican organizations that target competitive Oregon congressional races. His key recipients include the Congressional Leadership Fund that invested in Oregon's competitive House races. 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 Oregon.

  • Congressional Leadership Fund — $1,000,000 (2022, Federal Super PAC)

What Oregon Regulators Could Do

Oregon Attorney General Dan Rayfield and the Oregon Division of Financial Regulation have authority under the Oregon Securities Law (ORS Chapter 59) to investigate broker-dealer practices.

What Oregon Investors Can Do Now

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

  • File a complaint with the Oregon Division of Financial Regulation at https://dfr.oregon.gov
  • File a complaint with the Oregon Attorney General at https://www.doj.state.or.us
  • 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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