Tennessee Investor Alert

Citadel Securities and Tennessee 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 1.2 million Tennessee retail investors. Here is what Tennessee residents need to know.

How PFOF Affects Tennessee Investors

Nashville's booming economy and growing professional class includes a significant retail investor population. Tennessee residents face PFOF-based order routing without state enforcement action.

The Scale in Tennessee

Tennessee has an estimated 1.2 million Tennessee 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.

Tennessee's financial hub in Nashville has sophisticated financial professionals who understand these dynamics. But most Tennessee retail investors — those in Memphis, Knoxville 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 Tennessee

Kenneth Griffin has given millions in Tennessee-linked political contributions. His key recipients include Senator Marsha Blackburn and national Republican organizations. 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 Tennessee.

Marsha Blackburn (R-TN Senate) — $10,000 (2018, U.S. Senate)
Republican National Committee — $1,500,000 (2022, Federal Committee)

What Tennessee Regulators Could Do

Tennessee Attorney General Jonathan Skrmetti and the Tennessee Securities Division have authority under the Tennessee Securities Act of 1980 (T.C.A. §48-1-101 et seq.) to investigate broker-dealer conflicts.

What Tennessee Investors Can Do Now

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

File a complaint with the Tennessee Department of Commerce and Insurance, Securities Division at https://www.tn.gov/commerce/securities.html
File a complaint with the Tennessee Attorney General at https://www.tn.gov/attorneygeneral
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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