The White Law Group reviews the regulatory history of Cantor Fitzgerald.
Cantor Fitzgerald LP, the parent company of Cantor Fitzgerald & Co., is a global financial services firm. Cantor Fitzgerald & Co. (CRD#: 134/SEC#: 8-201) is a registered broker-dealer with the Securities and Exchange Commission (SEC) and a member of the Financial Industry Regulatory Authority (FINRA).
According to its CRD or broker report, Cantor Fitzgerald & Co., based in New York, NY has 94 disclosures on its record. These disclosures can include regulatory actions, customer complaints, arbitrations, or other events that have been reported to the CRD.
Regulatory Review: Cantor Fitzgerald
Cantor Fitzgerald Allegedly Makes Misleading Statements to Investors
The SEC last week reportedly found that Cantor FitzgeraldL.P. allegedly caused two SPACs under its control to make misleading statements to investors before their IPOs. The SPACs allegedly falsely claimed in public filings that they had not identified or engaged with potential merger targets, despite substantive discussions with private companies, including View Inc. and Satellogic Inc., which they eventually merged with.
These SPACs reportedly raised $750 million in IPOs during 2020 and 2021. Cantor Fitzgerald agreed to pay a $6.75 million civil penalty to settle the charges.
Rules Violations
August 2024: Cantor Fitzgerald & Co. agreed to pay a $100,000 fine, censure, and $51,214.16 in restitution plus interest to settle FINRA allegations of rule violations. Between July 2017 and May 2019, the firm reportedly failed to meet best execution obligations for 2,395 orders in OTC securities by not integrating OTC Link messages into its order management system.
This reportedly led to missed opportunities for better pricing for customers. Additionally, the firm’s supervisory system for best execution was allgedly inadequate, excluding critical reviews of OTC Link message prices and operating with flawed parameters. Technical issues also hindered compliance. These failures violated FINRA Rules 5310, 3110(a), and 2010. Cantor Fitzgerald reportedly improved its processes in May 2018 but continued to face deficiencies during the review period.
Firms agree to pay penalties of more than $1.1 billion
September 2022: The Securities and Exchange Commission reportedly announced charges against 16 Wall Street firms including Cantor Fitzgerald & Co. for “widespread and longstanding failures” by the firms and their employees to maintain and preserve electronic communications.
The firms reportedly admitted the facts set forth in their respective SEC orders, acknowledged that their conduct violated recordkeeping provisions of the federal securities laws, reportedly agreed to pay combined penalties of more than $1.1 billion, and have begun implementing improvements to their compliance policies and procedures to settle these matters, according to the press statement. Cantor Fitzgerald & Co. reportedly paid a $10 million penalty.
June 29, 2018: The Securities and Exchange Commission announced that Cantor Fitzgerald & Co. agreed to settle charges stemming from an improper commission-splitting scheme in which a former supervisor received off-book payments from traders he managed. The SEC also filed a litigated action against the former supervisor and former senior trader for their roles in the scheme.
FINRA Fines Cantor Fitzgerald & Co. $6,000,000 for Supervisory Issues
December 2015: Cantor Fitzgerald & Co. was reportedly censured, fined $6,000,000 and disgorged of $1,285,561 plus interest. The firm reportedly consented to findings that the firm had failed to adequately supervise sales of microcap securities pertaining to due diligence. Additionally FINRA reports that Cantor Fitzgerald didn’t identify red flags with unlawful distributions of unregistered securities.
The firm’s executive managing director of equity capital markets was fined $35,000 and suspended in all principal capacities for a period of three months; while the firm’s equity trader was fined $25,000 and suspended in all capacities for a period of two months.
Failure to Supervise
Brokerage firms have a legal and ethical responsibility of the firm to oversee the activities of its employees, including brokers and other registered representatives, to ensure that they are acting in the best interests of their clients.
This duty to supervise is a requirement under the rules and regulations set forth by the FINRA and the Securities and Exchange Commission (SEC). Brokerage firms are responsible for implementing and enforcing policies and procedures designed to detect and prevent potential violations of these regulations, including the mishandling of client funds, fraudulent or unethical behavior, or other misconduct.
The duty to supervise also requires brokerage firms to monitor the activities of their employees and to promptly investigate any red flags or potential violations that may arise. In cases where violations are discovered, the brokerage firm is required to take appropriate action, which may include disciplining the employee or reporting the violation to regulatory authorities.
When brokers violate securities laws, such as making unsuitable investments, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration.
Free Consultation with Securities Fraud Attorneys
If you have suffered losses investing with Cantor Fitzgerald, please contact the securities attorneys at The White Law Group. For a free consultation, please call the offices at 888-637-5510.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington.
We represent investors in FINRA arbitration claims in all 50 states. Our attorneys have recovered millions of dollars from many brokerage firms in the past, including Morgan Stanley.
The Financial Industry Regulatory Authority (FINRA) operates the largest securities dispute resolution forum in the United States, and has extensive experience in providing a fair, efficient and effective venue to handle a securities-related dispute.
Last modified: December 17, 2024
