Cantor Fitzgerald Settles SEC Charges

WASHINGTON (Reuters) – Wall Street brokerage Cantor Fitzgerald has agreed to pay a $6.75 million penalty to settle charges from the Securities and Exchange Commission (SEC) for misleading investors in blank-check companies it controlled, as announced on Thursday.

Cantor Fitzgerald did not respond immediately to a request for comment. The SEC noted that Cantor neither admitted nor denied the findings.

What are Blank-Check Firms?
Blank-check firms, also known as special purpose acquisition companies (SPACs), are shell companies that raise funds through a listing with the aim of acquiring a private company and taking it public, thus avoiding the traditional initial public offering (IPO) process.

The SEC reported that in 2020 and 2021, a team of Cantor Fitzgerald executives managed and controlled two SPACs that raised $750 million from investors via IPOs prior to the SPACs merging with View and Satellogic.

In their filings, the SPACs disclosed that they had not engaged in substantive discussions with potential acquisition targets ahead of their IPOs. However, the SEC stated that Cantor, representing the SPACs, had already begun negotiations with View and Satellogic at that time.

Sanjay Wadhwa, acting director of the SEC’s Division of Enforcement, commented, “This enforcement action reflects the straightforward proposition that any disclosures about substantive discussions with potential targets must be materially accurate.”