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Cantor Fitzgerald, the brokerage firm led by Donald Trump’s Commerce Secretary nominee Howard Lutnick, has been accused of making misleading statements to investors ahead of two public offerings that raised $750 million. A lawsuit has been filed by the Trade Commission.
The regulator, whose chairman, Gary Gensler, will resign next month in favor of candidate Trump, has accused the company of having “substantial” discussions about potential business objectives for a soon-to-be-public special purpose acquisition company, while disclosing went. The opposite.
The two Spacs that came to market in 2020 and 2021 merged with two companies, View, which makes “smart glass” windows, and Satellig, which makes Earth observation satellites, respectively. Kanter had previously “initiated negotiations” with both companies. The SEC argued that listing is subject to this.
The brokerage, one of the largest dealers in U.S. government debt, agreed to pay a $6.75 million penalty to resolve the charges, without admitting liability, the agency added. .
“Cantor Fitzgerald has held substantive discussions with several private companies regarding potential mergers; The SEC Enforcement Division repeatedly stated in public filings that it had not identified or approached any merger goals and misled investors about material investment considerations.” said Sanjay Wadhwa, Acting Director.
“This enforcement action reflects the straightforward proposition that any disclosures regarding substantive discussions with potential targets must be substantively accurate.”
“No investors have been harmed by the issues described in the order,” Cantor Fitzgerald said in a statement. “We are pleased that this matter has been resolved.”
Earlier this year, Mr. Kanter, Mr. Lutnick and others agreed to pay $12 million to end a civil lawsuit in Delaware challenging the deal with ViewSpac.
Mr. Lutnick, a billionaire who led Cantor for decades, is one of Mr. Trump’s most vocal supporters. He solidified his role as a trusted figure among his inner circle by supporting several of the president-elect’s policies, including deregulation, significant tax cuts, and tariffs on foreign goods.
Before being nominated as Commerce Secretary, Lutnick was given the role of co-chair of President Trump’s transition team, giving him influence over key positions, including one overseeing cryptocurrency regulation.
The SEC’s lawsuit marks the agency’s latest broadside against SPACs, financial products that Gensler has argued pose heightened investor protection risks. In January, the company finalized rules expanding disclosures for such vehicles to address concerns about conflicts of interest and misleading information.
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Gensler is scheduled to resign on January 20, the day President Trump is inaugurated. During his term, he has adopted tough enforcement policies in addition to a wide-ranging rulemaking agenda ranging from climate change disclosures to stock market reform.
President Trump nominated former SEC Commissioner Paul Atkins to replace Gensler. If confirmed by the Senate, Atkins is expected to introduce a looser enforcement and rulemaking agenda.
Additional reporting by James Fontanella-Khan
