SEC Charges Cantor Fitzgerald With Causing SPACS to Make Misleading Disclosures Pre-IPOs

SEC Charges Cantor Fitzgerald Over Misleading SPAC Disclosures

The Securities and Exchange Commission today charged global financial services firm Cantor Fitzgerald, L.P. with causing two special purpose acquisition companies (SPACs) that it controlled to make misleading statements to investors ahead of their initial public offerings (IPOs). Cantor Fitzgerald has agreed to pay a $6.75 million civil penalty to settle the SEC’s charges.

A SPAC is an entity with no underlying business operations that is formed to raise money through an IPO so it can then identify and acquire an operating business.

According to the SEC’s Order, in 2020 and 2021, a team of Cantor Fitzgerald executives managed and controlled two SPACs – CF Finance Acquisition Corp. II and CF Acquisition Corp. V – which raised $750 million from investors through IPOs ahead of the SPACs’ eventual mergers with View, Inc. and Satellogic Inc., respectively. The SEC’s order finds that Cantor Fitzgerald caused the SPACs in their SEC filings to deny having had contact or substantive discussions with potential business combination targets prior to their IPOs. However, the Order finds that at the time of each SPAC’s IPO, Cantor Fitzgerald personnel, acting on behalf of the SPACs, had already commenced negotiations with a small group of potential target companies for the SPACs, including with View and Satellogic, the companies with which the SPACs eventually merged.

Musk blasts SEC over offer to settle long-running federal probe

Elon Musk revealed on Thursday that he had received an offer to settle a federal investigation into potential securities fraud stemming from his 2022 purchase of Twitter, now known as X, which his lawyer appeared to dismiss on grounds that the probe was politically motivated.

The private talks burst into public view after Musk — now one of President-elect Donald Trump’s top advisers — shared a letter from his lawyer saying that the tech billionaire had been given 48 hours to accept a deal or face numerous, unspecified charges “imminently.”

ICAN Petitions Court to Compel SEC Review of “Accredited Investor” Rule

Did you know? A teacher who manages a $1M school budget isn’t “sophisticated” enough to invest in startups – but a trust fund heir who’s never worked is. Today we’re taking action to change that. Investor Choice Advocates Network has filed for a writ of mandamus to compel the SEC to review its outdated “accredited investor” definition. These rules currently prevent millions of qualified Americans from investing in private companies unless they meet arbitrary wealth or income thresholds – even if they’re successful entrepreneurs or business experts. This doesn’t just limit individual opportunity – it restricts capital formation and stifles innovation across our economy.

Fifth Circuit Strikes Down Nasdaq Board Diversity Rules

News reports suggest that Nasdaq has already said it will not seek further review of the appellate court’s decision. The SEC could seek further review, but even if the current SEC leadership were inclined to pursue these issues further, it seems unlikely that the new administration under the incoming Trump administration would continue the appeal.

With the Fifth Circuit’s ruling striking down the Nasdaq board diversity rules, it seems that the board diversity initiatives that were launched to great fanfare just a short time ago are now pretty much dead. Not only have the Nasdaq rules now been struck down, but the California board diversity statute also has been struck down. As discussed here, a federal court struck down the California board diversity statute as unconstitutional; indeed, a state court had previously stuck down the California statute on state law grounds. Interestingly, the federal court challenge to the California board diversity statute was also led by an organization affiliated with Edward Blum, the legal activist who heads AFBR.  

BlackRock Says 2% Bitcoin Allocation Is ‘Reasonable Range’

The world’s biggest asset manager says that Bitcoin does have a place in multi-asset portfolios — up to a certain point.

Giving Bitcoin a 1% to 2% weighting would produce a similar share of profile risk as the so-called Magnificent Seven technology stocks in a standard 60/40 portfolio of stocks and bonds, according to a BlackRock Investment Institute paper released Thursday. That’s a “reasonable range” to devote to Bitcoin, as anything beyond 2% would sharply increase crypto’s share of overall portfolio risk, the paper said.