The AG's Authority in Texas
Texas Attorney General Ken Paxton and the Texas State Securities Board have powerful enforcement tools under the Texas Securities Act (Tex. Rev. Civ. Stat. Art. 581) and the Texas Deceptive Trade Practices Act to investigate PFOF. The Texas SSB's history of aggressive enforcement makes it well-positioned to lead a multistate action.
The Harm to Texas Investors
Texas retail investors are the third most affected population in the nation. From Houston energy workers to Dallas tech professionals to Austin entrepreneurs, millions of Texas retail investors' orders are routed to Citadel Securities through PFOF arrangements. The Texas State Securities Board, one of the nation's most aggressive regulators historically, has taken no action on PFOF.
Ken Paxton has an estimated 5.5 million Texas retail investors — the third-largest state retail investor population as potential complainants. This is not an abstract regulatory question — it is a matter of whether Texas's chief law enforcement officer will protect the financial interests of Texas residents when federal regulators have failed to act.
The Griffin Political Context
Texas Attorney General Ken Paxton should be aware of the documented political investment Kenneth Griffin has made in Texas. Griffin has given more than $1.2 million in Texas-linked political contributions, plus tens of millions through national organizations that fund Texas candidates to Senators John Cornyn and Ted Cruz, Governor Greg Abbott, and national Republican organizations with heavy Texas investments. This political context does not determine what the AG should do — but it is relevant to understanding why federal and state regulators have been slow to act, and why an independent state investigation would be meaningful.
What the AG Should Investigate
- Whether PFOF arrangements between major discount brokers and Citadel Securities violate Texas consumer protection law by creating undisclosed conflicts of interest
- Whether Texas broker-dealers are meeting best execution obligations under state securities law
- Whether Citadel Securities' disclosures to Texas retail investors adequately describe the PFOF relationship
- Whether a multistate investigation coordinated through NASAA would be appropriate
Contact Ken Paxton
Texas residents can contact the Attorney General's office at https://www.texasattorneygeneral.gov to request investigation of PFOF-related broker-dealer practices affecting Texas investors.