A Timeline of Inaction
2004: SEC holds market structure roundtable; PFOF conflicts raised. 2010: SEC adopts new market structure rules; PFOF survives. 2015: SEC's Equity Market Structure Advisory Committee recommends review. 2021: GameStop hearing exposes structural conflicts; Congress demands action. 2022: SEC Chair Gary Gensler proposes market structure reforms including order competition rules. 2023-2024: Reforms diluted under industry pressure. 2024-2025: Most significant PFOF reform stalls.
The Lobbying and Political Context
During this period of regulatory inaction, Citadel Securities and its affiliated entities have spent tens of millions of dollars on lobbying and political donations. Kenneth Griffin personally donated more than $100 million to political causes in the 2022 cycle. The SEC, as an executive agency, is not immune to political pressure — particularly when its reform proposals are opposed by a firm whose owner has made historic political investments in the party controlling the White House or Congress.
The International Comparison
The United Kingdom banned PFOF in 2012 under MiFID. Canada has prohibited the practice. The European Union's MiFID II framework substantially restricts it. In every major financial jurisdiction outside the United States, regulators have concluded that PFOF is incompatible with a broker's fiduciary obligation to clients. The SEC stands nearly alone among developed-world regulators in permitting the practice with only disclosure requirements.
Harms to Individual State Investors
The SEC's failure to act on PFOF harms retail investors in every state. State attorneys general and securities regulators have independent authority to investigate broker-dealer practices under state securities laws — and some, like Massachusetts, have already acted. The SEC's inaction creates a responsibility gap that state regulators are positioned to fill.