Cantor Fitzgerald Fined $6.75M by SEC for Misleading Disclosures
Cantor Fitzgerald has agreed to pay a $6.75M fine to the Securities and Exchange Commission after being accused of misleading investors in relation to two special-purpose acquisition companies under its control. The SEC announced this settlement on Thursday.
The two SPACs in question, CF Finance Acquisition Corp. II and CF Acquisition Corp. V, raised $750M from investors before merging with smart-glass maker View and geospatial company Satellogic. View later announced plans to go private and file for bankruptcy due to pressure from Cantor.
According to the SEC, Cantor Fitzgerald falsely claimed in public filings that it had not identified or approached any potential merger targets, despite having substantive discussions with several private companies, including those ultimately merged with the SPACs. Sanjay Wadhwa, Acting Director of the SEC’s Division of Enforcement, highlighted the importance of accurate disclosures about discussions with potential targets.
Cantor submitted a settlement offer without admitting or denying the charges, which the SEC accepted. The crux of the issue revolves around materially false and misleading statements made by the SPACs, as per the SEC order. The SPACs claimed no serious discussions occurred with target companies, despite evidence to the contrary during the pre-IPO period.
The SEC charged Cantor with violating antifraud provisions of securities laws for failing to accurately depict the relationships between the SPACs and their merger targets. The SEC maintained that Cantor executives and subsidiary employees controlled the SPACs and engaged in substantive discussions with potential targets.
In light of these developments, Howard Lutnick, who serves as both the chairman and CEO of Cantor Fitzgerald, as well as holding executive roles in BGC Group and Newmark, announced plans to step down from all three positions if confirmed to a position in President Trump’s cabinet.
For more information on this matter, feel free to contact Bianca Barragán at bianca.barragan@bisnow.com.
