Cantor Fitzgerald Settles SEC Charges Over Misleading SPAC Disclosures

Financial services firm Cantor Fitzgerald L.P. has agreed to pay a $6.8 million fine to settle Securities and Exchange Commission charges that two special purpose acquisition companies it controlled made false and misleading statements ahead of their respective initial public offerings.

The two SPACs have since merged with other companies, one with View Inc., which makes smart glass and smart building technologies, and the other with satellite builder Satellogic Inc.

According to the SEC’s order, the alleged misstatements relate to activities conducted by a small team of Cantor executives and employees of Cantor subsidiaries that controlled the SPACs’ actions.

This included seeking out potential business combination targets and engaging in “substantive discussions with potential targets.”

For more stories like this, sign up for the CIO Alert daily newsletter. 

The SPAC that eventually merged with View Inc. was called CF Finance Acquisition Corp. II, and the Satellogic SPAC was CF Acquisition Corp. V. The two raised approximately $750 million in total, per the SEC.

The SEC alleges Cantor caused the SPACs to state falsely in their SEC filings and prospectuses that neither they nor anyone acting on their behalf had initiated any significant talks with any business combination target. The Cantor team also stated it had not contacted any of the prospective target businesses.

However, the SEC claims the Cantor team, acting on behalf of the SPAC, had already begun talks with View Inc. about a possible business combination as early as six months before the merger was announced. The regulator also alleges that the Cantor team similarly engaged in merger discussions with Satellogic at least eight months before the two announced their merger agreement.

“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,” Sanjay Wadhwa, acting director of the SEC’s Division of Enforcement, said in a release.

The order charges Cantor with causing violations of antifraud and proxy provisions of federal securities laws. Without admitting or denying the charges, Cantor agreed to cease and desist from the alleged violations in addition to the civil penalty.

Cantor’s Chairman and CEO Howard Lutnick was recently nominated by President-elect Donald Trump to be the next secretary of the Commerce Department. Lutnick is also co-chair of Trump’s transition team.