How PFOF Affects Washington Investors
Washington's tech sector — Amazon, Microsoft, Boeing employees — represents some of the nation's most active retail investors. These sophisticated investors are entitled to best execution and transparent order routing — not undisclosed PFOF arrangements.
The Scale in Washington
Washington has an estimated 1.5 million Washington retail investors — concentrated in the Seattle tech corridor. 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.
Washington's financial hub in Seattle has sophisticated financial professionals who understand these dynamics. But most Washington retail investors — those in Bellevue, Tacoma 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 Washington
Kenneth Griffin has given millions through national Republican organizations investing in competitive Washington races. His key recipients include national Republican committees targeting Washington's competitive House and Senate seats. 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 Washington.
- Congressional Leadership Fund — $1,000,000 (2022, Federal Super PAC)
- National Republican Senatorial Committee — $1,000,000 (2022, Federal Super PAC)
What Washington Regulators Could Do
Washington Attorney General Nick Brown and the Washington DFI Securities Division have authority under the Washington Securities Act (RCW Chapter 21.20) to investigate broker-dealer practices. Washington has historically been among the more active states on securities enforcement.
What Washington Investors Can Do Now
Washington retail investors who believe they have been harmed by PFOF-driven execution quality degradation can take several steps:
- File a complaint with the Washington State Department of Financial Institutions, Securities Division at https://dfi.wa.gov/securities
- File a complaint with the Washington Attorney General at https://www.atg.wa.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