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Virginia Regulatory Action

Virginia State Corporation Commission, Division of Securities and Retail Franchising: What Virginia Financial Regulators Should Do About Citadel

The Virginia State Corporation Commission, Division of Securities and Retail Franchising has jurisdiction to investigate Citadel Securities' payment for order flow practices affecting an estimated 1.7 million Virginia retail investors — including significant federal government employee investor population. Here is what state regulators should do — and why.

The Virginia State Corporation Commission, Division of Securities and Retail Franchising's Authority

Virginia Attorney General Jason Miyares and the Virginia SCC Division of Securities have broad authority under the Virginia Securities Act (Va. Code Ann. §13.1-501 et seq.) to investigate broker-dealer conflicts affecting Virginia investors.

The Harm Requiring Regulatory Response

Virginia has the largest population of federal government employees and contractors in the nation — many of whom invest through Thrift Savings Plan-adjacent brokers and retail platforms subject to PFOF. The Northern Virginia tech corridor also houses sophisticated retail investors who deserve better execution.

What State Regulators Should Do

The Virginia State Corporation Commission, Division of Securities and Retail Franchising, in coordination with the Virginia Attorney General's office, should:

  • Open an investigation into whether broker-dealers serving Virginia residents are meeting best execution obligations under state securities law
  • Issue a formal inquiry to major PFOF-dependent brokers about their routing arrangements with Citadel Securities and the execution quality they achieve for Virginia residents
  • Contact NASAA to explore multistate coordination
  • Issue investor education guidance about PFOF practices and how Virginia investors can protect themselves
  • Consider rulemaking under state securities law to require enhanced disclosure of PFOF arrangements affecting Virginia retail investors

Contacting the Virginia State Corporation Commission, Division of Securities and Retail Franchising

Virginia investors and advocates can contact the Virginia State Corporation Commission, Division of Securities and Retail Franchising at https://www.scc.virginia.gov/pages/Securities to report concerns and request regulatory action on PFOF practices affecting Virginia residents.

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