- The Securities and Exchange Commission charged Cantor Fitzgerald with violating laws related to disclosures by so-called blank-check companies before they raise money from the public.
- Cantor Fitzgerald's chairman and CEO, Howard Lutnick, was recently nominated by President-elect Donald Trump to lead the Commerce Department.
- The SEC said that Cantor agreed to settle the case by saying the firm would not violate the relevant securities laws again and pay a $6.75 million civil penalty.
WASHINGTON — The Securities and Exchange Commission charged global financial services firm Cantor Fitzgerald with violating laws related to disclosures by so-called blank-check companies before they raised money from the public.
Cantor Fitzgerald's chairman and CEO, Howard Lutnick, was recently nominated by President-elect Donald Trump to lead the Commerce Department. Lutnick is co-chair of Trump's transition team.
The SEC said that Cantor agreed to settle the case by saying the firm would not violate the relevant securities laws again and pay a $6.75 million civil penalty. The firm did not admit or deny the charges, which relate to certain antifraud and proxy provisions of federal securities laws.
Get top local stories in DFW delivered to you every morning. >Sign up for NBC DFW's News Headlines newsletter.
It was unclear Thursday night whether the Trump transition vetting team was aware of the SEC investigation of Cantor when the president-elect said he would nominate Lutnick to serve as secretary of Commerce.
An SEC order released Thursday found that Cantor caused two blank-check companies, which are also known as SPACs, to falsely deny in regulatory filings having had contact or substantive discussions with potential merger targets before those SPACs' initial public offerings.
U.S. & World
SPACs are shell companies that have no underlying business before they potentially merge with a target company that has business operations.
The two SPACs controlled by a team of Cantor executives raised $750 million from investors in IPOs before they merged with View Inc. and Satellogic, the SEC said.
The SEC said that the team of Cantor executives and employees of Cantor subsidiaries searched for potential companies for the two SPACs to merge with, and had "substantive discussions" with potential targets. Those discussions occurred before the blank-check companies were registered and began their IPOs.
"This enforcement action reflects the straightforward proposition that any disclosures about substantive discussions with potential targets must be materially accurate," said Sanjay Wadhwa, acting director of the SEC's Division of Enforcement, on Thursday.
"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," Wadhwa said in a statement.
Cantor spokesperson Erica Chase, in an email to CNBC, said, "No investor was ever harmed by the alleged issues described in the order."
"We are pleased to have concluded this matter by mutual agreement with the SEC," Chase said.
The Trump transition did not immediately reply to a request for comment on the case.
