Cantor Fitzgerald agreed to pay $100,000 as part of a settlement with the Financial Industry Regulatory Authority (FINRA) regarding alleged disclosure failures about which the firm had previously been warned.
Cantor violated Regulation NMS (National Market System) when it published public quarterly reports on its handling of customers’ orders in securities that contained inaccurate and incomplete information, according to FINRA’s disciplinary action published Thursday. The firm was also faulted for deficiencies in its supervisory procedures.
The details: In January 2020, Cantor published its required NMS report for the fourth quarter of 2019, which “failed to disclose … the material aspects of Cantor’s relationship with one of its specified execution venues, including a description of Cantor’s payment for order flow and profit-sharing relationship with the venue,” according to FINRA.
In May 2020, when Cantor published its NMS report for the first quarter of the year, it did not provide information required by a 2018 amendment regarding NMS securities that are options contracts, FINRA continued. The report allegedly contained empty tables and sections regarding specified execution venues.
Compliance considerations: FINRA uncovered the alleged violations in a 2020 examination. The self-regulatory organization said it warned Cantor regarding the accuracy of its NMS reports in 2017 and 2019.
FINRA said the firm failed to enforce its written supervisory procedures regarding NMS reports. After August 2020, Cantor revised its procedures and implemented additional reviews of its reports prior to publishing.
A representative for Cantor did not respond to a request for comment. The firm neither admitted nor denied FINRA’s findings.
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