Howard Lutnick, Trump's pick for Secretary of Commerce, is a billionaire Wall Street CEO who will ensure the Trump Administration only works for people like him, leaving Americans in the dust, like he already has to his employeees, partners, and investors over the years.
The U.S. Security and Exchange Commission repeatedly charged Lutnick’s Cantor Fitzgerald with a variety of violations for allegedly misleading investors and violating antifraud laws, and failing to identify large traders. The U.S. Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission also fined Cantor for bad record-keeping of off-channel communications.
A big proponent of special-purpose acquisition companies (SPACs), Lutnick was among the insiders that profited off SPACs, but SPACs were generally bad for ordinary investors. The U.S. Securities and Exchange Commission ultimately charged Cantor for misleading investors about two SPACs offerings it controlled.
Court documents revealed that Lutnick and his firm were accused of “pulling money from people,” making Lutnick “the most hated guy on Wall Street.” Insiders noted that Lutnick’ firm struggled with record-keeping and infighting, and highlighted that Lutnick paid himself generously while stiffing employees and partners.
Giancarlo Devasini, owner of Tether, was one of Lutnick’s most important clients. Tether was a shady cryptocurrency firm under investigation for possible violations of anti-money laundering and sanctions laws. Devasini privately said Lutnick planned to use his political clout to to defuse regulatory threats facing Tether.
Lutnick’s Cantor Las Vegas sportsbook business faced record fines after Vice President Michael Colbert accepted unlawful wagers and acted as an agent in a "nationwide illegal betting operation." In 2014, Lutnick signed off on a $5.5 million fine with the Nevada Gaming Control Board to avoid the complete collapse of a billion dollar investment. In 2016, Cantor’s gambling affiliate paid $22.5 million to the federal government to settle the ongoing probes.
The SEC Charged Cantor Fitzgerald With Lying To SPAC Investors. According to Axios, “The U.S. Securities & Exchange Commission on Thursday charged Cantor Fitzgerald with lying to SPAC investors, and said that the Wall Street firm had agreed to pay a $6.75 million civil penalty.” [Axios, 12/13/24]
Lutnick Headed Cantor Fitzgerald, As Well As Both Of The Two SPACS In Question. According to Axios, “Lutnick also was CEO of the two SPACs in question, which allegedly had discussions with merger targets View and Satellogic before going public (which is not allowed and which was not disclosed to investors ahead of the IPOs.)” [Axios, 12/13/24]
The SEC Charged Cantor Fitzgerald With Misleading Investors About Two SPAC Offerings That It Controlled. According to Investmentnews.com, “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.” [Investmentnews.com, 12/13/24]
The SEC Order Charged Cantor With Causing Violations Of Antifraud And Other Laws. According to an SEC Press Release, “The order charges Cantor with causing violations of certain antifraud and proxy provisions of the federal securities laws. Without admitting or denying the order’s findings, Cantor agreed to cease and desist from violations of the charged provisions and to pay the aforementioned $6.75 million civil penalty.” [SEC Press Release, 12/12/24]
The U.S. Securities and Exchange Commission Fined Cantor Fitzgerald $1.4 Million For Failure To Report Large Traders. According to Reuters, “The U.S. Securities and Exchange Commission on Friday fined Cantor Fitzgerald $1.4 million for repeatedly failing to identify and report customers who qualified as large traders. Cantor, a New York-based investment bank and brokerage, did not admit or deny wrongdoing in agreeing to the civil fine. Large traders trade at least 2 million shares or $20 million a day, or at least 20 million shares or $200 million a month. They are typically professional investors, or institutional investors such as banks, hedge funds, insurers and mutual funds.” [Reuters, 7/14/23]
Cantor Fitzgerald Failed To Track More Than 100 Large Traders And Failed To Identify Itself As A Large Trader. According to Reuters, “Cantor failed to track and report more than 100 large traders over the last six years. It also said Cantor repeatedly failed for more than a decade to file forms identifying itself or affiliates as large traders.” [Reuters, 7/14/23]
Cantor Was Caught Up In Wall Street Record Keeping Failures, Facing $1.8 Billion In Penalties From U.S. Securities And Exchange Commission (SEC) And The U.S. Commodity Futures Trading Commission. According to Investopedia, “The U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC) have levied more than $1.8 billion in penalties on various Wall Street firms for record-keeping failures. [Investopedia, 9/28/22]
Cantor And Other Firms Failed To Keep Records Of Off-Line Business Communications On Personal Devices. According to a press release from the U.S. Securities and Exchange Commission, “From January 2018 through September 2021, the firms’ employees routinely communicated about business matters using text messaging applications on their personal devices. The firms did not maintain or preserve the substantial majority of these off-channel communications, in violation of the federal securities laws.” [Press Release – Securities and Exchange Commission, 9/27/22]
Cantor Agreed To Pay $16 Million For Their Failed Record-Keeping Of Off-Channel Communications. According to the Wall Street Journal, “Eight of the largest entities, including Goldman Sachs and Morgan Stanley, agreed to pay $125 million to the SEC and at least $75 million to the CFTC. Jefferies will pay a total of $80 million to the two market regulators, and Nomura agreed to pay $100 million. Cantor agreed to pay $16 million.” [Wall Street Journal, 9/27/22]
The SEC Found That Some Supervisors Were Aware And Even Encouraged Use Of Unauthorized Messaging Apps. According to the Wall Street Journal, “The SEC said it found ‘pervasive off-channel communications.’ In some cases, supervisors at the banks were aware of and even encouraged employees to use unauthorized messaging apps instead of communicating over company email or other approved platforms.” [Wall Street Journal, 9/27/22]
During The Special-Purpose Acquisition Companies (SPAC) Boom On Wall Street, Many Dealmakers Made Money Just Before Share Prices Collapsed. According to the Wall Street Journal, “The SPAC boom cost investors billions. Insiders in the companies that went public were on the other side of the trade. Executives and early investors in companies that went public via special-purpose acquisition companies sold shares worth $22 billion through well-timed trades, profiting before share prices collapsed.” [Wall Street Journal, 5/30/23]
Lutnick Was A Big Pusher Of SPACs In Recent Years. According to the Wall Street Journal, “Lutnick made special-purpose acquisition companies, or SPACs, a big focus in recent years. The deals made money for Cantor, but many worked out badly for ordinary investors.” [Wall Street Journal, 12/1/24]
Lutnick Was Among The Insiders That Made Money On SPACs That Were Bad For Ordinary Investors. According to the Wall Street Journal, “Lutnick made special-purpose acquisition companies, or SPACs, a big focus in recent years. The deals made money for Cantor, but many worked out badly for ordinary investors.” [Wall Street Journal, 12/1/24]
According To New York University Professor Michael Ohlrogge, SPAC Investments Were Largely Bad For Ordinary Investors But Cantor’s Were Worse. According to the Wall Street Journal, “Shares of Cantor’s four other SPAC companies are down about 80% or more. ‘It is worse than normal, which is saying a lot for SPACs, because normal is so darn bad,’ said Michael Ohlrogge, a law professor at New York University. Companies that did SPAC deals between 2019 and 2021 have seen their shares fall an average of about 55%, while insiders often made money, he said.” [Wall Street Journal, 12/1/24]
Cantor Created Nine Of Its Own Shell Companies And Only One Of Them Trade At A Higher Price. According to the Wall Street Journal, “Cantor also created and funded nine of its own shell companies, six of which took private targets public. Only one of those, investment firm GCM Grosvenor, trades at a higher price than when it went public.” [Wall Street Journal, 12/1/24]
Cantor Fitzgerald Helped Set Up A Fitness SPAC With Shares That Were Down 99%. According to the Wall Street Journal, “In 2020, for instance, Cantor helped set up a SPAC endorsed by basketball legend Shaquille O’Neal. It merged with fitness firm Beachbody the following year. Shares are down about 99% since their debut at roughly 10 cents, when adjusted for a reverse stock split.” [Wall Street Journal, 12/1/24]
Cantor Paid $12 Million To Settle A Lawsuit Regarding One SPAC That Went Bankrupt. According to the Wall Street Journal, “Another Cantor SPAC merged with View, a maker of ‘smart windows’ that control for heat and glare, in 2021. The SoftBank Group-backed company said in an investor presentation it would eventually be profitable in part because ‘nobody likes blinds.’ View filed for bankruptcy this past spring. In August, Lutnick and Cantor agreed to pay $12 million to settle a lawsuit from individual investors who said they were misled about the firm’s growth prospects.” [Wall Street Journal, 12/1/24]
The SEC Charged Cantor Fitzgerald With Misleading Investors About Two SPAC Offerings That It Controlled. According to Investmentnews.com, “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.” [Investmentnews.com, 12/13/24]
In Court Documents, Lutnick And His Firm Were Accused Of “Pulling Money From People,” Making Him “The Most Hated Guy On Wall Street.” According to Forbes, “But Lutnick has a darker side, which emerges in court documents and conversations with people who have done business with him. For years, they say, he and his firm have been pulling money from people—clients, investors, colleagues—making Lutnick, according to one former partner, ‘the most hated guy on Wall Street.’” [Forbes, 11/22/24]
Insiders Described Lutnick’s Empire As “A Tangle Of Self-Dealing,” Record Keeping Problems, Infighting, And “Squeezing People.” According to Forbes, “His multibillion-dollar empire–which includes two publicly traded companies and a privately held investment bank—is a tangle of self-dealing, with recordkeeping issues that date back decades and infighting that continues to the present day. ‘The whole firm is about f——— people,’ says another former employee. ‘It’s about squeezing people.’” [Forbes, 11/22/24]
Lutnick Paid Himself “Like A King” But Reportedly Stiffed Employees And Partners, Making Employees Take 10%-20% Of Their Salary In Partnership Units And Stiffing Former Partners Who Allegedly Violated Broad Non-Compete Agreements. According to Forbes, “Now worth more than $1.5 billion, Lutnick pays himself like a king, cutting into partnership profits. ‘He could do what he wanted,’ says a former partner. According to a lawsuit filed last year in federal court, Lutnick made employees take 10% to 20% of their pay in partnership units, which sounded nice but caused problems when the employees tried to get their money out. Agreements allegedly gave Lutnick sole authority to stiff former partners whom he believed violated broadly defined non-compete provisions. An estimated 40% did not end up with all their money after departing, according to the lawsuit, which says it was all part of a scheme to fool employees and enrich Lutnick.” [Forbes, 11/22/24]
According To The Lawsuit, About 40% Of Workers Did Not End Up With Their Money After Departing, Alleging A “Scheme To Fool Employees And Enrich Lutnick.” According to Forbes, “Now worth more than $1.5 billion, Lutnick pays himself like a king, cutting into partnership profits. ‘He could do what he wanted,’ says a former partner. According to a lawsuit filed last year in federal court, Lutnick made employees take 10% to 20% of their pay in partnership units, which sounded nice but caused problems when the employees tried to get their money out. Agreements allegedly gave Lutnick sole authority to stiff former partners whom he believed violated broadly defined non-compete provisions. An estimated 40% did not end up with all their money after departing, according to the lawsuit, which says it was all part of a scheme to fool employees and enrich Lutnick.” [Forbes, 11/22/24]
One Of Lutnick’s Most Important Clients Was Giancarlo Devasini, Owner Of Shady Cryptocurrency Firm Tether. According to the Wall Street Journal, “The presidential transition adviser Howard Lutnick’s most important client is Donald Trump. But as chairman of the Wall Street trading firm Cantor Fitzgerald, Lutnick counts as one of his other most important clients an ex-plastic surgeon named Giancarlo Devasini, the owner of the cryptocurrency firm Tether.” [Wall Street Journal, 11/23/24]
Cantor Fitzgerald Held Most Of Tether’s $134 Billion In Assets, And Lutnick Majority-Owned Cantor. According to the Wall Street Journal, “Cantor, which is majority-owned by Lutnick, holds most of Tether’s $134 billion in assets, largely U.S. Treasury bills, in exchange for tens of millions of dollars of fees each year, according to people familiar with Cantor’s business.” [Wall Street Journal, 11/23/24]
Cantor Formed A Deal With Tether Valued At Up To $600 Million. According to the Wall Street Journal, “Cantor’s relationship with Tether deepened when the trading firm struck a deal to invest in the crypto giant, Lutnick and Devasini have each told business associates. Under the agreement, which was made in the past year, Cantor stood to receive about a 5% ownership interest in Tether. The interest, which hasn’t been previously reported, was valued by Cantor at as much as $600 million, according to some of the business associates.” [Wall Street Journal, 11/23/24]
The Wall Street Journal Reported That Devasini Said Lutnick Planned To Use His Political Clout To Defuse Regulatory And Other Threats To Tether. According to the Wall Street Journal, “Lutnick and Devasini each have a big interest in future administration policy. Devasini said privately earlier this year that Lutnick will use his political clout to try to defuse threats facing Tether, according to business associates of the two men.” [Wall Street Journal, 11/23/24]
As Co-Chair Of Trump’s Transition Team, Lutnick Vetted Candidates For Top Jobs That Would Involve Regulating Tether. According to the Wall Street Journal, “In his current role as co-chair of the transition team, Lutnick is vetting candidates for other top government jobs that could involve supervising Tether.” [Wall Street Journal, 11/23/24]
Tether Was Under Investigation For Possible Violations Of Anti-Money-Laundering And Sanctions Laws. According to the Wall Street Journal, “Tether, whose unregulated cryptocurrency of the same name has spawned a hard-to-police shadow financial system, is under investigation by the Treasury and Justice departments for possible violations of anti-money-laundering and sanctions laws, The Wall Street Journal reported in October, citing people familiar with the matter.” [Wall Street Journal, 11/23/24]
Government Officials Said Tether Was A Preferred Medium For Arms Dealers, Fraud Rings And Terrorist Organizations. According to the Wall Street Journal, “Tether operates the world’s most transacted cryptocurrency. Known as a stablecoin for its 1:1 backing with the U.S. dollar, tether gained a foothold among crypto speculators as a safe way to cash out trading profits. It has also caught the attention of government officials who say tether is a preferred medium for Russian arms dealers, international fraud rings and terrorist organizations to move money.” [Wall Street Journal, 11/23/24]
Tether Was Used To Fund Hamas And Other Groups Designated As Terrorist Organizations. According to the New York Post, “Three militant groups — Hamas, Palestinian Islamic Jihad and Hezbollah — received $93 million through crypto in the year leading up to the massacre, primarily on Tether, according to a review of Israeli government seizure orders and blockchain analytics reports, the Wall Street Journal reported. ‘Tether is being used for terrorist funding and more widely being used in crypto frauds and scams,’ Adam Zarazinski, CEO of crypto currency intelligence firm Inca Digital, told The Post.” [New York Post, 2/6/24]
Fearful Of Arrest, Tether Owner Refused To Travel To The U.S. And Viewed Lutnick As A Shield For His Business. According to the Wall Street Journal, “Devasini, an Italian who has refused to travel to the U.S. for fear of arrest, according to some business associates, sees Lutnick as a shield against the efforts of American authorities and rivals to disrupt his lucrative business.” [Wall Street Journal, 11/23/24]
Cantor Fitzgerald Bookmaking Subsidiary CG Technology Was Hit With Record Breaking Fines Over Corrupt Vice President Michael Colbert, Who Accepted Unlawful Wagers And Acted As An “Agent In A Nationwide Illegal Betting Operation.” According to The Daily Beast, “The head of Cantor Fitzgerald’s boneheaded bookmaking subsidiary last week signed off on a record $5.5 million fine to settle a devastating 18-count Nevada Gaming Control Board complaint alleging that Amaitis should have known company vice president Michael Colbert was accepting illegal wagers and acting as an agent in a nationwide illegal betting operation. Cantor Fitzgerald Chairman Howard Lutnick also signed the recommended settlement.” [The Daily Beast, 1/21/14]
Investigators Found That Known Organized Crime Members Were Working Out Of The Cantor Gaming Sports Book. According to The Daily Beast, “By then, however, investigators were well aware of the wiseguys working out of Cantor’s sports book at the M Resort, where millions in bets were transacted. According to the 33-page state complaint, Colbert served directly under Amaitis and used his position as vice president of race and sports book risk management to move millions in sports bets for gambler Gadoon ‘Spanky’ Kyrollos through messenger bettor Paul Sexton and others.” [The Daily Beast, 1/21/14]
Multiple Federal Agencies, The New York Police Department And The Nevada Gaming Control Board Were Involved In The Investigations. According to the Wall Street Journal, “The Cantor affiliate agreed to pay $16.5 million to resolve the criminal investigation that involved the U.S. attorneys’ offices in Brooklyn and Nevada as well as the U.S. Postal Inspection Service, the Internal Revenue Service’s Criminal Investigation unit, the New York City Police Department and the Nevada Gaming Control Board. It has also agreed to pay a multimillion-dollar penalty to the Treasury’s Financial Crimes Enforcement Network, the people said.” [The Wall Street Journal, 9/30/16]
2014: Lutnick Signed Off On $5.5 Million Fine With The Nevada Gaming Control Board To Avoid Total Collapse Of A Billion Dollar Investment. According to the Las Vegas Review-Journal, “There is a reason officials from CG Technology (formerly Cantor Gaming) said they were ‘glad to have reached a resolution’ with Nevada gaming regulators and will pay the largest fine ever leveled against a casino or affiliated company. The Las Vegas-based bookmaker — a subsidiary of Wall Street financial giant Cantor Fitzgerald LP — faced a potential death sentence by the state Gaming Control Board. That prospect gave CG/Cantor’s leadership a ‘Sophie’s Choice’ quandary. Instead of watching a decadelong, billion-dollar investment go down the drain, CG Technology CEO Lee Amaitis and Cantor Fitzgerald Chairman Howard Lutnick accepted the stipulated agreement to the 18-count complaint, which included the $5.5 million fine.” [Las Vegas Review-Journal, 1/22/14]
2016: Cantor’s Gambling Affiliate Paid $22.5 Million To The Federal Government To Settle Ongoing Probes. According to the Wall Street Journal, “Cantor Fitzgerald LP’s sports-betting affiliate has agreed to pay $22.5 million in penalties and forfeiture to the U.S. government in conjunction with its involvement in illegal gambling and money laundering, according to people familiar with the matter.” [The Wall Street Journal, 9/30/16]