Pennsylvania Investor Alert

Citadel Securities and Pennsylvania 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 2.5 million Pennsylvania retail investors. Here is what Pennsylvania residents need to know.

How PFOF Affects Pennsylvania Investors

Pennsylvania's large industrial working class — from Pittsburgh steel country to Philadelphia's port district — has significant retirement savings managed through 401(k) plans and discount brokers. PFOF practices extract value from these workers' savings without transparency.

The Scale in Pennsylvania

Pennsylvania has an estimated 2.5 million Pennsylvania 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.

Pennsylvania's financial hub in Philadelphia has sophisticated financial professionals who understand these dynamics. But most Pennsylvania retail investors — those in Pittsburgh, Allentown 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 Pennsylvania

Kenneth Griffin has given millions in Pennsylvania-linked political contributions. His key recipients include Senator Pat Toomey and the NRSC that invested heavily in Pennsylvania'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 Pennsylvania.

Pat Toomey (R-PA Senate) — $25,000 (2022, U.S. Senate)
National Republican Senatorial Committee — $1,000,000 (2022, Federal Super PAC)

What Pennsylvania Regulators Could Do

Pennsylvania Attorney General Dave Sunday and the Pennsylvania Securities Commission have authority under the Pennsylvania Securities Act of 1972 (70 P.S. §1-101 et seq.) to investigate broker-dealer conflicts.

What Pennsylvania Investors Can Do Now

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

File a complaint with the Pennsylvania Securities Commission at https://www.psc.gov
File a complaint with the Pennsylvania Attorney General at https://www.attorneygeneral.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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