Global financial services firm Cantor Fitzgerald, L.P. has been charged with making misleading statement to investors, according to the Securities and Exchange Commission.
The SEC alleges the company caused two special purpose acquisition companies (SPACs) that it controlled to make misleading statements prior to their initial public offerings (IPOs). Cantor Fitzgerald has agreed to pay a $6.75 million civil penalty to settle the charges.
“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. “This enforcement action reflects the straightforward proposition that any disclosures about substantive discussions with potential targets must be materially accurate.”
According to the SEC, two SPACs, CF Finance Acquisition Corp. II and CF Acquisition Corp. V, raised $750 million from investors through IPOs ahead of their eventual mergers with View, Inc. and Satellogic, Inc., respectively. An investigation by the SEC found that Cantor Fitzgerald caused the SPACS to deny contact with their potential business combination targets, despite Cantor Fitzgerald having already entered into negotiations with a small group of potential target companies, including View and Satellogic.
The SEC charged Cantor Fitzgerald with violation certain antifraud and proxy provisions of the federal securities laws. For its part, Cantor Fitzgerald agreed to cease and desist from violations of the charged provision, and, without admitting or denying the findings, pay a civil penalty to settle the case.