SEC Fines Cantor Fitzgerald $6.75 Million for Misleading SPAC Investors

The Securities and Exchange Commission (SEC) has charged Cantor Fitzgerald, L.P. with misleading investors over its handling of two special purpose acquisition companies (SPACs). The firm, which has agreed to pay a $6.75 million civil penalty to settle the case, found itself under scrutiny for bending the truth about its early dealings with potential merger targets.

SPACs, often called blank-check companies, operate on a simple premise: raise money through an IPO, then scout for an acquisition target to merge with, turning the target into a public company. In theory, these vehicles give investors access to promising businesses with fewer regulatory hurdles. In practice, however, their success hinges on transparency—something the SEC says Cantor Fitzgerald fell short on.

In 2020 and 2021, Cantor executives controlled two SPACs—CF Finance Acquisition Corp. II and CF Acquisition Corp. V—which collectively raised $750 million. In filings to investors, these SPACs claimed they had not identified or approached any potential merger targets at the time of their IPOs. Yet, as the SEC uncovered, Cantor personnel had already begun substantive discussions with several private companies, including View, Inc. and Satellogic Inc., the very companies these SPACs eventually merged with.

“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,” said Sanjay Wadhwa, Acting Director of the SEC’s Division of Enforcement.

The SEC’s findings paint a troubling picture of SPAC sponsors who seem to forget that their disclosures serve as the backbone of investor trust. Misleading statements, especially about something as pivotal as merger discussions, undermine the entire premise of these investment vehicles.

Without admitting or denying the findings, Cantor has agreed to cease further violations of antifraud and proxy provisions of the securities laws. But the $6.75 million penalty is more than a financial hit—it’s a reminder that the SEC is closely watching SPACs and their sponsors.

For compliance, risk, and GRC professionals, this case offers critical takeaways. It underscores the importance of robust disclosure controls and rigorous oversight of SPAC activities. Ensuring that statements made in public filings are accurate and complete is not just a regulatory mandate but a cornerstone of organizational integrity and risk mitigation.

This enforcement action should serve as a call to action for firms involved in SPACs and similar vehicles. Compliance teams must proactively engage in reviewing and validating disclosures, while risk managers should assess potential exposure from misleading or incomplete statements. GRC professionals, in particular, have an opportunity to strengthen governance frameworks that ensure clear lines of accountability for SPAC-related activities.

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