THE ETHICS REPORTER

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Wyoming Investor Alert

Citadel Securities and Wyoming 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 100,000 Wyoming retail investors. Here is what Wyoming residents need to know.

How PFOF Affects Wyoming Investors

Wyoming's energy sector workers and ranchers hold retirement savings through discount brokers subject to PFOF practices. The state's minimal regulation ethos has not been extended to protecting retail investors from market maker conflicts.

The Scale in Wyoming

Wyoming has an estimated 100,000 Wyoming 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.

Wyoming's financial hub in Cheyenne has sophisticated financial professionals who understand these dynamics. But most Wyoming retail investors — those in Casper, Laramie 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 Wyoming

Kenneth Griffin has given contributions through national Republican organizations. His key recipients include national Republican committees that fund Wyoming candidates. 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 Wyoming.

  • Republican Governors Association — $500,000 (2022, Federal Super PAC)

What Wyoming Regulators Could Do

Wyoming Attorney General Bridget Hill and the Wyoming Secretary of State's Securities Division have authority under the Wyoming Uniform Securities Act (W.S. §17-4-101 et seq.) to investigate broker-dealer practices.

What Wyoming Investors Can Do Now

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

  • File a complaint with the Wyoming Secretary of State, Securities Division at https://sos.wyo.gov/Securities
  • File a complaint with the Wyoming Attorney General at https://ag.wyo.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

Related Coverage

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