The Securities and Exchange Commission on Thursday charged finance/brokerage firm Cantor Fitzgerald with fraud over making misleading disclosures in SEC filings, leading to the company paying a $6.75 million settlement without admitting or denying the charges.
Cantor is one of the biggest dealers of US government debt, according to Financial Times. Cantor’s CEO, Howard Lutnick, is President-elect Donald Trump’s nominee for commerce secretary and co-chair of the Trump transition team. He’s been a vocal supporter of Trump’s proposed policies, including foreign tariffs and deregulation.
According to the SEC, two Cantor-managed shell corporations misled investors in SEC filings to believe that they had no contact with any potential merger targets, despite having actually had identified target private companies and discussed with them prior to the filings.
“Cantor Fitzgerald misled investors about a critical investment consideration by repeatedly stating in public filings that it had not identified or approached any potential merger targets, despite having had substantive discussions with several private companies regarding a potential merger, including with the companies with which its [shell companies] eventually merged," said Sanjay Wadhwa, acting director of the SEC’s Division of Enforcement.
The SEC charged Cantor with violations of antifraud provisions of federal securities laws.
“This enforcement action reflects the straightforward proposition that any disclosures about substantive discussions with potential targets must be materially accurate,” Wadhwa said.
While Cantor Fitzgerald agreed to cease and desist from further alleged violations, the firm neither confirmed nor denied the charges.
Cantor spokesperson Erica Chase, in an email to CNBC, said, “No investor was ever harmed by the alleged issues described in the order."
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