UNITED STATES OF AMERICA 

Before the 

COMMODITY FUTURES TRADING COMMISSION 

In the Matter of: 

Cantor Fitzgerald & Co., 

Respondent. 

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CFTC Docket No. 22-45

ORDER INSTITUTING PROCEEDINGS PURSUANT TO 

SECTION 6(c) AND (d) OF THE COMMODITY EXCHANGE ACT, MAKING 

FINDINGS, AND IMPOSING REMEDIAL SANCTIONS

I. INTRODUCTION

The Commodity Futures Trading Commission (“Commission”) has reason to believe that 

from at least 2018 to the present (“Relevant Period”), Cantor Fitzgerald & Co. (“Cantor” or 

“Respondent”) violated, as set forth below, Section 4g of the Commodity Exchange Act (“Act”), 

7 U.S.C. § 6g, and Commission Regulations (“Regulations”) 1.31, 1.35, and 166.3, 17 C.F.R. 

§§ 1.31, 1.35, 166.3 (2021). Therefore, the Commission deems it appropriate and in the public

interest that public administrative proceedings be, and hereby are, instituted to determine

whether Respondent engaged in the violations set forth herein and to determine whether any

order should be issued imposing remedial sanctions.

In anticipation of the institution of an administrative proceeding, Respondent has 

submitted an Offer of Settlement (“Offer”), which the Commission has determined to accept. 

Respondent admits the facts set forth in Section II below, acknowledges that its conduct violated 

the Act and Regulations and consents to the entry of this Order Instituting Proceedings Pursuant 

to Section 6(c) and (d) of the Commodity Exchange Act, Making Findings, and Imposing 

Remedial Sanctions (“Order”), and acknowledges service of this Order.1

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 Respondent agrees that the findings of fact and conclusions of law in this Order shall be taken as true and correct 

and be given preclusive effect without further proof in this proceeding and any other proceeding brought by the 

Commission or to which the Commission is a party or claimant, including but not limited to, a proceeding in 

bankruptcy or receivership. Respondent does not consent to the use of the Offer or this Order, or the findings or 

conclusions in this Order, by any other party in any other proceeding.
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II. FINDINGS 

The Commission finds the following: 

A. SUMMARY 

 The Act and Regulations impose recordkeeping and supervision requirements on 

Commission registrants to ensure that they responsibly discharge their crucial role in our 

markets. Compliance with these requirements is essential to the Commission’s efforts to 

promote the integrity, resilience, and vibrancy of the U.S. derivatives markets through sound 

regulation. 

 During the Relevant Period, Cantor employees, including those at senior levels, 

communicated both internally and externally using unapproved methods, including via personal 

text messages and WhatsApp messages. These written communications were sent and received 

by Cantor employees and included messages related to Cantor’s businesses as Commission 

registrants that were required to be maintained under Commission-mandated recordkeeping 

requirements. These written business-related communications via unapproved methods 

generally were not maintained and preserved by Cantor, and Cantor generally would not have 

been able to furnish the communications promptly to a Commission representative if and when 

requested. As a result, Cantor violated, as set forth below, Section 4g of the Act, 7 U.S.C. § 6g, 

and Regulations 1.31, and 1.35, 17 C.F.R. §§ 1.31, 1.35 (2021). 

 In addition, the widespread use of unauthorized communication methods by Cantor’s 

employees to conduct firm business violated Cantor’s own policies and procedures, which 

prohibited such communications. Cantor did not maintain adequate internal controls with 

respect to the use of unapproved communication methods for business-related communications. 

Because Cantor failed to implement a diligent supervisory system to ensure compliance with 

Commission recordkeeping requirements and the firm’s own policies and procedures, and 

because the widespread use of unauthorized communication methods resulted in the firm’s 

failure to maintain Commission-required records, Cantor failed to diligently supervise matters 

related to its business as a Commission registrant in violation of Regulation 166.3, 17 C.F.R. 

§ 166.3 (2021), as set forth below. 

B. RESPONDENT 

Cantor Fitzgerald & Co. is a financial services company with its principal place of 

business in New York City. Cantor is registered with the Commission as a Futures Commission 

Merchant (“FCM”). 

C. FACTS 

In connection with the Commission’s investigation, Cantor disclosed that it conducted a 

review of the use of unapproved communications methods by its employees. That review 

demonstrated that there was widespread and longstanding use of unapproved communication 

methods by employees—including senior-level employees—to engage in firm business, 

including relating to trading in CFTC regulated derivatives markets. 
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Importantly, during the Relevant Period, Cantor’s policies and procedures broadly 

prohibited employees from using unapproved communication methods, such as personal text 

messages and WhatsApp, to engage in business-related communications. 

Messages sent through Cantor-approved communications methods were monitored, 

subject to review, and when appropriate, archived. By contrast, messages sent using unapproved 

communication methods, including over personal WhatsApp, email, and text messages, were 

generally not monitored, subject to review, or archived. 

As a result of Cantor’s failure to ensure that employees—including supervisors and 

senior-level employees—complied with the firm’s communications policies and procedures, 

Cantor failed to maintain thousands of business-related communications, including 

communications in connection with its commodities and swaps businesses, and thus failed 

diligently to supervise its businesses as a Commission registrant. These supervision failures 

resulted in the widespread use of unapproved methods of communication by Cantor employees 

in violation of the firm’s policies and procedures, as well as a widespread failure to maintain 

certain records required to be maintained pursuant to Commission recordkeeping requirements. 

A sampling analysis, for example, of the personal devices of twenty-three Cantor 

employees, including two associated persons of Cantor’s Futures Commission Merchant 

business, illustrates the breadth of Cantor’s supervision and recordkeeping failures. Of those 

twenty-three employees, which included several senior representatives, including division heads 

and desk heads, all but three had violated Cantor’s communications policies and procedures by 

using personal text message and other unapproved methods to communicate with brokers, 

coworkers, and market participants. Further, those employees’ communications revealed that 

numerous additional Cantor employees conducted firm business via unapproved methods. 

The Commission’s investigation concluded that certain of the communications by Cantor 

employees using unapproved communication methods constituted records that were required to 

be kept pursuant to Commission recordkeeping requirements, but were not preserved and 

maintained by Cantor. 

Cantor’s recordkeeping and supervision failures were firm-wide and involved employees 

at all levels of authority. Moreover, employees’ use of unapproved communication methods was 

not hidden within the firm. To the contrary, certain supervisors—the very people responsible for 

supervising employees to prevent this misconduct—routinely communicated using unapproved 

methods on their personal devices. In fact, senior supervisors responsible for implementing 

Cantor’s policies and procedures, and for overseeing employees’ compliance with those policies 

and procedures, themselves failed to comply with firm policies by communicating using 

unapproved methods on their personal devices about the firm’s Commission-regulated 

businesses. 
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III. LEGAL DISCUSSION 

A. Cantor’s Failure to Keep Required Records in Violation of Section 4g of the 

Act and Regulation 1.35 

Section 4g of the Act requires FCMs and other registrants to create and keep books and 

records pertaining to transactions and positions in such form and manner and for such period as 

may be required by the Commission. 7 U.S.C. § 6g. Regulation 1.35(a)(1), 17 C.F.R. 

§ 1.35(a)(1) (2021), sets forth some of the books and records that are required to be created and 

maintained by FCMs. Specifically, an FCM must: 

(i) Keep full, complete, and systematic records . . . of all transactions relating to 

its business of dealing in commodity interests . . . which shall include all orders 

(filled, unfilled, or canceled), . . . and all other records, which have been prepared 

in the course of its business of dealing in commodity interests . . . . 

 

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(iii) Keep all oral and written communications provided or received concerning 

quotes, solicitations, bids, offers, instructions, trading, and prices that lead to the 

execution of a transaction in a commodity interest . . . whether transmitted by 

telephone, voicemail, facsimile, instant messaging, chat rooms, electronic mail, 

mobile device, or other digital or electronic media . . . . 

With the exception of pre-trade communications, all such records are required to be “kept in a 

form and manner that allows for the identification of a particular transaction.” Regulation 

1.35(a)(5), 17 C.F.R. § 1.35(a)(5) (2021). 

As a result of the widespread use of unapproved methods of communication by firm 

employees, which communications were not preserved and maintained, Cantor failed to keep 

full, complete, and systematic records of all transactions relating to its business of dealing in 

commodity interests, in violation of Section 4g of the Act and Regulation 1.35. 

B. Cantor’s Failure to Keep Records in Required Manner in Violation of 

Regulation 1.31 

Regulation 1.31(b)(4), 17 C.F.R. § 1.31(b)(4) (2021), requires that registrants keep all 

books and records that are required to be maintained under the Act and Regulations in such 

manner as to make them “readily accessible” for a period of two years for paper records and for 

the duration of the retention period for electronic records. Upon request of the Commission, all 

of these documents are required to be “promptly” produced. Regulation 1.31(d), 17 C.F.R. 

§ 1.31(d) (2021). 

By failing to keep all Commission-required records in such a manner as to make them 

“readily accessible,” Cantor violated Regulation 1.31. 
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C. Cantor’s Failure to Diligently Supervise in Violation of Regulation 166.3 

Regulation 166.3 states: 

Each Commission registrant, except an associated person who has no supervisory 

duties, must diligently supervise the handling by its partners, officers, employees 

and agents (or persons occupying a similar status or performing a similar 

function) of all commodity interest accounts carried, operated, advised or 

introduced by the registrant and all other activities of its partners, officers, 

employees and agents (or persons occupying a similar status or performing a 

similar function) relating to its business as a Commission registrant. 

17 C.F.R. § 166.3 (2021). 

A violation under Regulation 166.3 is an independent violation for which no underlying 

violation is necessary. See Collins, 1997 WL 761927, at *10. A violation of Regulation 166.3 is 

demonstrated by showing either that: (1) the registrant’s supervisory system was generally 

inadequate; or (2) the registrant failed to perform its supervisory duties diligently. Murlas 

Commodities, Inc., 1995 WL 523563, at *9; Sansom Refining Co. v. Drexel Burnham Lambert, 

Inc., CFTC No. 82-R448, 1990 WL 282783, at *11 (Feb. 16, 1990) (noting that, under 

Regulation 166.3, registrants have “duty to develop procedures for the detection and deterrence 

of possible wrongdoing by [their] agents” (internal quotation omitted)); In re GNP Commodities, 

Inc., CFTC No. 89-1, 1992 WL 201158, at *17-19 (Aug. 11, 1992) (providing that, even if an 

adequate supervisory system is in place, Regulation 166.3 can still be violated if the supervisory 

system is not diligently administered); see also In re Rosenthall Collins Grp., LLC, CFTC No. 

12-18, 2012 WL 1242406, at *6 (Apr. 12, 2012) (consent order) (respondent failed to perform 

supervisory duties diligently by not following its compliance procedures that were in place). 

Evidence of violations that “should be detected by a diligent system of supervision, either 

because of the nature of the violations or because the violations have occurred repeatedly” is 

probative of a failure to diligently supervise. In re Paragon Futures Assoc., CFTC No. 88-18, 

1992 WL 74261, at *14 (Apr. 1, 1992) (“The focus of any proceeding to determine whether Rule 

166.3 has been violated will be on whether [a] review [has] occurred and, if it did, whether it was 

‘diligent.’”). 

Cantor failed to supervise its business as a Commission registrant by failing to maintain 

adequate supervisory systems to ensure that employees complied with Commission 

recordkeeping requirements and firm policies and procedures that prohibited business-related 

communications on unapproved methods of communication. The inadequacy of Cantor’s 

supervisory systems is demonstrated by the longstanding and repeated violations of Cantor’s 

Commission recordkeeping obligations and firm policies and procedures and the fact that the 

supervisory failures resulted in the repeated failure to maintain Commission-required records, to 

ensure that the required records were readily accessible, and that the records could be promptly 

produced upon request. By this conduct, Cantor failed to supervise diligently its officers, 

employees, and agents in violation of Regulation 166.3. 
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IV. FINDINGS OF VIOLATIONS 

Based on the foregoing, the Commission finds that, during the Relevant Period, Cantor 

violated Section 4g of the Act, 7 U.S.C. § 6g, and Regulations 1.31, 1.35, and 166.3, 17 C.F.R. 

§§ 1.31, 1.35, 166.3 (2021). 

V. OFFER OF SETTLEMENT 

Respondent has submitted the Offer in which it: 

A. Acknowledges service of this Order; 

B. Admits the facts described in Section II above and acknowledges that its conduct violated 

the Act and Regulations; 

C. Admits the jurisdiction of the Commission with respect to all matters set forth in this 

Order and for any action or proceeding brought or authorized by the Commission based 

on violation of or enforcement of this Order; 

D. Waives: 

1. The filing and service of a complaint and notice of hearing; 

2. A hearing; 

3. All post-hearing procedures; 

4. Judicial review by any court; 

5. Any and all objections to the participation by any member of the Commission’s 

staff in the Commission’s consideration of the Offer; 

6. Any and all claims that it may possess under the Equal Access to Justice Act, 

5 U.S.C. § 504, and 28 U.S.C. § 2412, and/or the rules promulgated by the 

Commission in conformity therewith, Part 148 of the Regulations, 17 C.F.R. 

pt. 148 (2021), relating to, or arising from, this proceeding; 

7. Any and all claims that it may possess under the Small Business Regulatory 

Enforcement Fairness Act of 1996, Pub. L. No. 104-121, tit. II, §§ 201–253, 110 

Stat. 847, 857–74 (codified as amended at 28 U.S.C. § 2412 and in scattered 

sections of 5 U.S.C. and 15 U.S.C.), relating to, or arising from, this proceeding; 

and 

8. Any claims of Double Jeopardy based on the institution of this proceeding or the 

entry in this proceeding of any order imposing a civil monetary penalty or any 

other relief, including this Order; 
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E. Stipulates that the record basis on which this Order is entered shall consist solely of the 

findings contained in this Order to which Respondent has consented in the Offer; 

F. Consents, solely on the basis of the Offer, to the Commission’s entry of this Order that: 

1. Makes findings by the Commission that Cantor violated Section 4g of the Act, 

7 U.S.C. § 6g, and Regulations 1.31, 1.35, and 166.3, 17 C.F.R. §§ 1.31, 1.35, 

166.3 (2021); 

2. Orders Cantor to cease and desist from violating Section 4g of the Act and 

Regulations 1.31, 1.35, and 166.3; 

3. Orders Respondent to pay a civil monetary penalty in the amount of six million US 

dollars ($6,000,000), plus post-judgment interest within fourteen days of the date 

of entry of this Order; and 

4. Orders Respondent and its successors and assigns to comply with the conditions 

and undertakings consented to in the Offer and as set forth in Part VI of this Order; 

and 

G. Represents that Respondent has engaged in a review of certain recordkeeping failures and 

begun a program of remediation. 

Upon consideration, the Commission has determined to accept the Offer. 

VI. ORDER 

Accordingly, IT IS HEREBY ORDERED THAT: 

A. Cantor and its successors and assigns shall cease and desist from violating Section 4g of 

the Act, 7 U.S.C. § 6g, and Regulations 1.31, 1.35, and 166.3, 17 C.F.R. §§ 1.31, 1.35, 

166.3 (2021). 

B. Respondent shall pay a civil monetary penalty in the amount of six million US dollars

($6,000,000) (“CMP Obligation”), within fourteen days of the date of the entry of this 

Order. If the CMP Obligation is not paid in full within fourteen days of the date of entry 

of this Order, then post-judgment interest shall accrue on the CMP Obligation beginning 

on the date of entry of this Order and shall be determined by using the Treasury Bill rate 

prevailing on the date of entry of this Order pursuant to 28 U.S.C. § 1961. 

Respondent shall pay the CMP Obligation and any post-judgment interest by electronic 

funds transfer, U.S. postal money order, certified check, bank cashier’s check, or bank 

money order. If payment is to be made other than by electronic funds transfer, then the 

payment shall be made payable to the Commodity Futures Trading Commission and sent 

to the address below:
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MMAC/ESC/AMK326 

Commodity Futures Trading Commission 

6500 S. MacArthur Blvd. 

HQ Room 266 

Oklahoma City, OK 73169 

9-AMC-AR-CFTC@faa.gov 

 If payment is to be made by electronic funds transfer, Cantor shall contact Tonia King or 

her successor at the above email address to receive payment instructions and shall fully 

comply with those instructions. Respondent shall accompany payment of the CMP 

Obligation with a cover letter that identifies the paying Respondent and the name and 

docket number of this proceeding. The paying Respondent shall simultaneously transmit 

copies of the cover letter and the form of payment to the Chief Financial Officer, 

Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, NW, 

Washington, D.C. 20581; 

C. Respondent and its successors and assigns shall comply with the following conditions 

and undertakings set forth in the Offer: 

1. Cantor shall conduct: 

a. A comprehensive review of Cantor’s supervisory, compliance, and other 

policies and procedures designed to ensure that Cantor’s electronic 

communications, including those found on personal electronic devices, 

including without limitation, cellular phones (“Personal Devices”), are 

preserved in accordance with the requirements of the Act, the Regulations, 

and Cantor’s policies and procedures. 

b. A comprehensive review of training conducted by Cantor to ensure personnel 

are complying with the requirements regarding the preservation of electronic 

communications, including those found on Personal Devices, in accordance 

with the requirements of the Act and the Regulations, and Cantor’s policies 

and procedures, including by ensuring that Cantor personnel certify in writing 

on a quarterly basis that they are complying with preservation requirements. 

c. An assessment of the surveillance program measures implemented by Cantor 

to ensure compliance, on an ongoing basis, with the requirements found in the 

Act, the Regulations, and Cantor’s policies and procedures to preserve 

electronic communications, including those found on Personal Devices. 

d. An assessment of the technological solutions that Cantor has begun 

implementing to meet the record retention requirements of the Act, the 

Regulations, and Cantor’s policies and procedures, including an assessment of 

the likelihood that Cantor personnel will use the technological solutions going 

forward and a review of the measures employed by Cantor to track employee 

usage of new technological solutions. 
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e. An assessment of the measures used by Cantor to prevent the use of 

unauthorized communications methods for business communications by 

employees. This assessment should include, but not be limited to, a review of 

the firm’s policies and procedures to ascertain if they provide for any 

significant technology and/or behavioral restrictions that help prevent the risk 

of the use of unapproved communications methods on Personal Devices (e.g., 

trading floor restrictions). 

f. A review of Cantor’s electronic communications surveillance routines to 

ensure that electronic communications through approved communications 

methods found on Personal Devices are incorporated into Cantor’s overall 

communications surveillance program. 

g. A comprehensive review of the framework adopted by Cantor to address 

instances of non-compliance by Cantor employees with Cantor’s policies and 

procedures concerning the use of Personal Devices to communicate about 

Cantor business in the past. This review shall include a survey of how Cantor 

determined which employees failed to comply with Cantor policies and 

procedures, the corrective action carried out, an evaluation of who violated 

policies and why, what penalties were imposed, and whether penalties were 

handed out consistently across business lines and seniority levels. 

2. Written Report of Findings: 

a. Within forty-five (45) days after completion of the review set forth in subparagraphs 1.a. through 1.g. above, Cantor shall submit a detailed written 

report of its findings to the Commission staff (the “Report”). The Report shall 

include a description of the review performed, the names of the individuals 

who performed the review, the conclusions reached, and a summary of the 

plan for implementing the recommended changes in or improvements to 

Cantor’s policies and procedures. 

b. Cantor shall adopt all recommendations contained in the Report within one 

hundred and thirty-five (135) days of the date of the Report. 

c. The Report will likely include confidential financial, proprietary, competitive 

business or commercial information. Public disclosure of the reports could 

discourage cooperation, impede pending or potential government 

investigations or undermine the objectives of the reporting requirement. For 

these reasons, among others, the reports and the contents thereof are intended 

to remain and shall remain non-public, except: (1) pursuant to court order; 

(2) as agreed to by the parties in writing; (3) to the extent that the Commission 

determines in its sole discretion that disclosure would be in furtherance of the 

Commission’s discharge of its duties and responsibilities; or (4) is otherwise 

required by law. 
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3. One-Year Evaluation: Cantor shall assess its program for the preservation, as 

required under the Act, Regulations, and Cantor’s policies and procedures, of 

electronic communications, including those found on Personal Devices, commencing 

one year after submitting the Report required by Paragraph 2.a above. Cantor shall 

require this review to evaluate Cantor’s progress in the areas described in Paragraph 

1.a through 1.g above. After this review, Cantor shall submit a report (the “One Year 

Report”) to the Commission staff and shall ensure that the One Year Report includes 

an updated assessment of Cantor’s policies and procedures with regard to the 

preservation of electronic communications (including those found on Personal 

Devices), training, surveillance programs, and technological solutions implemented in 

the prior year period. 

4. Reporting Discipline Imposed: For two years following the entry of this Order, 

Cantor shall notify the Commission staff as follows upon the imposition of any 

discipline imposed by Cantor, including, but not limited to, written warnings, loss of 

any pay, bonus, or incentive compensation, or the termination of employment, with 

respect to any employee found to have violated Cantor’s policies and procedures 

concerning the preservation of electronic communications, including those found on 

Personal Devices: (1) at least 48 hours before the filing of a Form 8-T; or (2) within 

ten (10) days of the imposition of other discipline. 

5. Recordkeeping: Cantor shall preserve, for a period of not less than six (6) years from 

the end of the fiscal year last used, the first two (2) years in an easily accessible place, 

any record of compliance with these undertakings. 

6. Public Statements: Respondent agrees that neither it nor any of its successors and 

assigns, agents or employees under its authority or control shall take any action or 

make any public statement denying, directly or indirectly, any findings or conclusions 

in this Order or creating, or tending to create, the impression that this Order is without 

a factual basis; provided, however, that nothing in this provision shall affect 

Respondent’s: (1) testimonial obligations; or (2) right to take legal positions in other 

proceedings to which the Commission is not a party. Respondent and its successors 

and assigns shall comply with this agreement, and shall undertake all steps necessary 

to ensure that all of its agents and/or employees under its authority or control 

understand and comply with this agreement. 

7. Cooperation, in General: Respondent shall cooperate fully and expeditiously with the 

Commission, including the Commission’s Division of Enforcement, in this action, 

and in any current or future Commission investigation or action related thereto. 

Respondent shall also cooperate in any investigation, civil litigation, or administrative 

matter related to, or arising from, the subject matter of this action. 

8. Partial Satisfaction: Respondent understands and agrees that any acceptance by the 

Commission of any partial payment of Respondent’s CMP Obligation shall not be 

deemed a waiver of its obligation to make further payments pursuant to this Order, or 
a waiver of the Commission's right to seek to compel payment of any remaining 

balance. 

9. Deadlines: For good cause shown, Division staff may extend any of the procedural 

dates relating to the undertakings. Unless otherwise specified, deadlines for 

procedural dates shall be counted in calendar days, except that if the last day falls on 

a weekend or federal holiday, the next business day shall be considered to be the last 

day. 

10. Change of Address/Phone: Until such time as Respondent satisfies in full its CMP 

Obligation as set forth in this Order, Respondent shall provide written notice to the 

Commission by certified mail of any change to its telephone numbers and mailing 

addresses within ten calendar days of the change. 

The provisions of this Order shall be effective as of this date. 

By the Commission. 

Christopher 

~t~ J. Kirkpatrick 

Secretary of the Commission 

Commodity Futures Trading Commission 

Dated: September 27, 2022 

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