According to the SEC, the firm allegedly caused two special purpose acquisition companies (SPACs) under its control to issue “misleading statements to investors” ahead of their initial public offerings (IPOs). In response, Cantor Fitzgerald has agreed to settle the charges by paying a $6.75 million civil penalty.
On November 19, Trump selected Howard Lutnick, Cantor Fitzgerald’s CEO, to lead the Department of Commerce. Lutnick, who also serves as co-chair of the Trump transition team, was praised by the president-elect for creating “the most sophisticated process and system to assist us in creating the greatest Administration America has ever seen.”
“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 SPACs eventually merged,” Acting Director of the SEC’s Division of Enforcement Sanjay Wadhwa said in the press release. “This enforcement action reflects the straightforward proposition that any disclosures about substantive discussions with potential targets must be materially accurate.”
Cantor Fitzgerald neither admitted nor denied the findings outlined in the SEC’s order, according to the press release. SEC Commissioner Mark Uyeda issued a dissenting statement on Thursday, asserting that the alleged misstatements and omissions were not material.
On December 4, the president-elect announced his nomination of Paul Atkins to chair the SEC, stating in a Truth Social post that Atkins would enhance capital markets to better serve the needs of investors. Atkins, a former SEC commissioner, is also the CEO and founder of Patomak Global Partners, a risk management consultancy.
Before Trump’s decision to nominate Atkins, current SEC Chair Gary Gensler announced in November that he would step down when Trump returns to the Oval Office in January 2025. Gensler has served as SEC chair since April 17, 2021.
“No investor was ever harmed by the alleged issues described in the order,” Cantor Fitzgerald said in a statement shared with the Daily Caller News Foundation. “We are pleased to have concluded this matter by mutual agreement with the SEC.”
“We decline comment beyond our public filings and press release on this matter,” an SEC spokesperson told the DCNF.
