WASHINGTON (Reuters) -Wall Street brokerage Cantor Fitzgerald has agreed to pay a $6.75 million penalty to settle Securities and Exchange Commission charges that it misled investors in blank-check companies it controlled, the regulator said on Thursday.
“No investor was ever harmed by the alleged issues described in the order,” Cantor Fitzgerald said in a statement. “We are pleased to have concluded this matter by mutual agreement with the SEC.”
The firm’s chairman and CEO, Howard Lutnick, was recently nominated by U.S. President-elect Donald Trump to serve as Commerce Secretary.
According to the SEC, Cantor neither admitted nor denied the SEC’s findings.
Blank-check firms, or special purpose acquisition companies (SPACs) are shell companies that raise funds through a listing with the intention of acquiring a private company and taking it public, circumventing the initial public offering process.
According to the SEC, in 2020 and 2021 a team of Cantor Fitzgerald executives managed and controlled two SPACs that raised $750 million from investors through IPOs ahead of the SPACs’ eventual mergers with View and Satellogic.
In their SEC filings, the SPACs said they had not had substantive discussions with potential takeover targets prior to their IPOs, even though Cantor, acting on behalf of the SPACs, had already commenced negotiations with View and Satellogic, the SEC said.
“This enforcement action reflects the straightforward proposition that any disclosures about substantive discussions with potential targets must be materially accurate,” Sanjay Wadhwa, acting director of the SEC’s Division of Enforcement, said in a statement.
