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FINRA fines Cantor Fitzgerald $2M for Reg SHO violations, supervisory failures

Jaclyn Jaeger | March 7, 2019

The Financial Industry Regulatory Authority announced March 5 that it has fined Cantor Fitzgerald & Co. $2 million for Regulation SHO violations and supervisory failures spanning a period of at least five years. As part of the settlement, Cantor also agreed to retain an independent consultant to conduct a comprehensive review of the firm’s policies, systems, procedures, and training related to Reg SHO.

The Securities and Exchange Commission adopted Reg SHO to address concerns regarding persistent failures to deliver potentially abusive “naked” short selling (e.g., the sale of securities that an investor does not own or has not borrowed). The rule requires firms to deliver the shares on settlement date or take affirmative action to close out the “failure to deliver” shares by purchasing or borrowing the securities. If the failure to...

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