Cantor Fitzgerald, a broker linked to Tether, has agreed to pay a $6.75 million penalty to the Securities and Exchange Commission (SEC) for misleading investors ahead of two special purpose acquisition companies’ (SPACs) initial public offerings (IPOs) that raised $750 million.
The SEC’s Division of Enforcement Acting Director, Sanjay Wadhwa, stated that Cantor Fitzgerald had made false claims in public filings, denying any discussions with potential merger targets, despite engaging in substantive talks with several private companies, including those the SPACs eventually merged with.
Although Cantor Fitzgerald neither admitted nor denied the charges, it paid the civil penalty as per the SEC order.
Read more: Why are Tether and Cantor Fitzgerald lending near identical amounts?
Special purpose acquisition companies (SPACs), commonly known as blank-check companies, are entities without operational business used for mergers or acquisitions. Cantor Fitzgerald utilized its SPACs, CF Finance Acquisition Corp. II and CF Acquisition Corp. V, to raise funds before merging with View, Inc. and Satellogic Inc., respectively.
A spokesperson for Cantor Fitzgerald told CNBC that no investor suffered losses due to the alleged issues outlined in the order and expressed satisfaction in resolving the matter with the SEC through mutual agreement.
Howard Lutnick, the CEO and Chairman of Cantor Fitzgerald, is currently leading the Commerce Department under Donald Trump’s administration and serves as co-chair for Trump’s transitional team.
According to a report by The Wall Street Journal, Cantor Fitzgerald acquired a 5% stake in Tether valued at up to $600 million. The broker also holds the majority of Tether’s $134 billion in assets in exchange for substantial fees.