Cantor Fitzgerald & Co has agreed to pay a fine of $73,000 as a part of a settlement with the Financial Industry Regulatory Authority (FINRA).
Between September 2017 and January 2022, Cantor violated Rule 104 of Regulation M of the Securities Exchange Act of 1934 and FINRA Rule 2010 in 12 instances by filing untimely notices of its intent to engage in syndicate covering transactions.
Between February 2017 and January 2022, Cantor violated FINRA Rules 5190 and 2010 in 75 instances by filing untimely or inaccurate notifications with FINRA in connection with its participation in security distributions that were subject to Regulation M under the Exchange Act.
From at least February 2017 to May 2024, Cantor also violated FINRA Rules 3110(a), 3110(b), and 2010 by failing to establish and maintain a supervisory system, including written supervisory procedures (WSPs), reasonably designed to achieve compliance with Regulation M-related notification rules.
For these violations, Cantor was fined $73,000.
Regulation M is the SEC’s principal anti-manipulation provision that applies to distributions of covered securities and is intended to address manipulative conduct by preventing persons with an interest in the outcome of a distribution from influencing the pricing of those distributions and conditioning the market in order to facilitate a distribution.
Rule 101 of Regulation M makes it unlawful for underwriters, broker- dealers, issuers, and other distribution participants to directly or indirectly “bid for, purchase, or attempt to induce any person to bid for or purchase, a covered security during the applicable restricted period.”
Depending on the security, the restricted period begins either one or five business days prior to the determination of the offering price, or if the restricted period has already commenced, at such time a firm becomes a distribution participant.
