South Carolina Investor Alert

Citadel Securities and South Carolina 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 875,000 South Carolina retail investors. Here is what South Carolina residents need to know.

How PFOF Affects South Carolina Investors

South Carolina's retiree and military veteran population has significant retirement savings managed through discount brokers, all subject to PFOF practices that benefit a company investing heavily in politicians who oversee financial regulation.

The Scale in South Carolina

South Carolina has an estimated 875,000 South Carolina 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.

South Carolina's financial hub in Columbia has sophisticated financial professionals who understand these dynamics. But most South Carolina retail investors — those in Charleston, Greenville 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 South Carolina

Kenneth Griffin has given more than $1.5 million in South Carolina-linked political contributions. His key recipients include Senators Lindsey Graham and Tim Scott — two of the most prominent Republican senators — and the Republican National Committee. 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 South Carolina.

Lindsey Graham (R-SC Senate) — $50,000 (2020, U.S. Senate)
Tim Scott (R-SC Senate) — $25,000 (2020, U.S. Senate)
Republican National Committee — $1,500,000 (2022, Federal Committee)

What South Carolina Regulators Could Do

South Carolina Attorney General Alan Wilson and the SC Securities Division have authority under the South Carolina Uniform Securities Act (S.C. Code Ann. §35-1-101 et seq.) to investigate broker-dealer conflicts.

What South Carolina Investors Can Do Now

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

File a complaint with the South Carolina Secretary of State, Securities Division at https://www.sos.sc.gov/securities
File a complaint with the South Carolina Attorney General at https://www.scag.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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