Cantor Fitzgerald's Irish unit fined €452,790 by Central Bank for failing to report suspicious trades

Michael McAleer

The Central Bank has fined the Irish unit of US investment group Cantor Fitzgerald €452,790 for failing to report suspicious transactions that may have indicated market abuse.

Between March 2017 and June 2023, Cantor failed on multiple occasions to detect and report suspicious orders and transactions.

The Central Bank found the firm also lacked effective governance arrangements and failed to properly document its assessments of potential market abuse. Following the Central Bank’s enforcement action, Cantor has admitted to the breaches.

The investigation found six instances between September 2017 and May 2022 where Cantor’s trade surveillance system flagged potentially suspicious transactions. Despite clear indicators of market abuse, Cantor did not report them, and by doing so were "reckless" in failing to submit Suspicious Transaction and Order Reports (STORs) to the regulator.

Cantor had established a STOR Committee to review suspicious transactions, but its operation was found to be ineffective.

The Central Bank also noted Cantor’s failure to maintain proper records explaining why certain transactions were not reported. Brokers within the firm neglected to escalate suspicious comments made by clients while placing orders, further undermining market integrity.

Colm Kincaid, the Central Bank’s Director of Enforcement, emphasised that firms must have robust systems to report potential market abuse, stating that such failures erode market confidence and fair competition. He urged all financial firms to review their STOR processes in light of Cantor’s failings.

While the initial fine was set at €646,840, it was reduced by 30 per cent as part of a settlement agreement. Cantor has since confirmed that it has fully remediated its deficiencies as of June 2023.

The long-time head of the wider Cantor Fitzgerald Group, Howard Lutnick, was confirmed last week as the Mr Trump’s secretary of commerce. He stepped down as chairman and chief executive of the US-based group as a result, having led the business for four decades.

Cantor’s Irish unit was led by Ronan Reid between 2012 and late 2023, following the US group’s acquisition of Dolmen Stockbrokers, which he previously headed up. He was succeeded by Gerard Casey.