Biden Admin Goes After Finance Firm Led By Trump Cabinet Nominee

The Securities and Exchange Commission (SEC) on Thursday charged Cantor Fitzgerald L.P., a global financial services firm headed by one of President-elect Donald Trump’s cabinet nominees, with violating federal securities laws.

The SEC charged the finance firm for allegedly causing two special purpose acquisition companies (SPACs) that it controlled to “make misleading statements to investors ahead of their initial public offerings (IPOs),” according to a Thursday press release. Cantor Fitzgerald has agreed to settle the SEC’s charges by paying a $6.75 million civil penalty.

Trump on Nov. 19 selected Howard Lutnick, Cantor Fitzgerald’s CEO, to head the Department of Commerce. Lutnick is also co-chair for the Trump transition team, where he “created the most sophisticated process and system to assist us in creating the greatest Administration America has ever seen,” the president-elect claimed in the announcement.

“Cantor Fitzgerald misled investors about a critical investment consideration by repeatedly stating in public filings that it had not identified or approached any potential merger targets, despite having had substantive discussions with several private companies regarding a potential merger, including with the companies with which its SPACs eventually merged,” Acting Director of the SEC’s Division of Enforcement Sanjay Wadhwa said in the press release. “This enforcement action reflects the straightforward proposition that any disclosures about substantive discussions with potential targets must be materially accurate.”

Cantor Fitzgerald did not admit or deny the order’s findings, according to the press release. SEC Commissioner Mark Uyeda published a dissenting statement