FINRA imposes $250,000 fine on Cantor Fitzgerald
Cantor Fitzgerald & Co has agreed to pay a fine of $250,000 as a part of a settlement with the United States Financial Industry Regulatory Authority (FINRA). The settlement stems from Cantor’s alleged violations of FINRA rules concerning reporting of short interest positions.
In particular, between January 12, 2018, and July 13, 2018, Cantor erroneously reported short interest positions custodied with and already reported by its clearing firm, resulting in duplicative and inaccurate reporting. Specifically, Cantor inaccurately reported 25,434 short interest positions, totalling 65.71 million shares. Instead, the company should have reported 743 short interest positions, totalling 10.5 million shares during the review period.
Also, during the period in question, Cantor failed to establish and maintain a supervisory system, including written supervisory procedures, reasonably designed to achieve compliance with FINRA Rule 4560. In particular, Cantor’s supervisory system governing short interest reporting failed to include any steps reasonably designed to ensure the accuracy of its short interest reporting by accounting for and excluding positions custodied and reported by its clearing firm.
Let’s note that, upon notification from FINRA, Cantor revised its reporting procedures.
On top of the $250,000 fine, the firm concedes to a censure.
The settlement offer was accepted by FINRA on May 6, 2021.