Howard Lutnik
Announced as Trump’s nominee for Secretary of Commerce
Originally considered for the role of Treasury Secretary (and endorsed for the position by Elon Musk), Howard Lutnick is set to be nominated by President-elect Donald Trump for Secretary of Commerce. Lutnick, the CEO of Cantor Fitzgerald, is a longtime friend of Trump’s who resided in Trump Palace in the 1990s. Over the course of the Trump campaign Lutnick has played an influential role, speaking on the campaign trail, organizing fundraisers, and co-chairing the transition team.
Lutnick’s presence in Trump’s orbit has drawn ethics questions. In October 2024, Politico reported on allegations that Lutnick was using his position in Trump’s transition operation to advance his business interests. As one Republican official quoted in the article said, “The onus is on him not to use the power in an abusive manner, and that has not been the case.” Following his nomination to be Commerce Secretary, Lutnick’s business dealings in China have also come under scrutiny.
Lutnick began his career at Cantor Fitzgerald in the 1980s. He became close to the firm’s founder Bernie Cantor and, when Cantor began to suffer from ill-health, and he and several partners attempted to buy the firm from Cantor’s family. When that failed, Lutnick “activated an incapacity committee that had been outlined in the partnership agreements,” which “voted to strip Cantor of control of the firm he founded.” This action sparked years of legal wrangling between Lutnick and Cantor’s wife Iris that ended with Iris leaving the business “with a pile of cash, no control and a burning distrust of Lutnick, whom she barred from visiting her husband’s cemetery.”
In a recent profile of Lutnick, sources called him “the most hated guy on Wall Street,” whose firm is “is a tangle of self-dealing, with recordkeeping issues that date back decades and infighting that continues to the present day.” One former Cantor Fitzgerald partner said of Lutnick, “If you’re not on Howard’s level … you’re just another piece of s—- in his way.” A former employee remarked, “He only cares about himself.”
During Lutnick’s time at Cantor Fitzgerald, the firm has accumulated a number of fines. In 2011, the Commodity Futures Trading Commission fined the firm $100,000 for “improper trading in the gasoline futures market.” In 2012, Cantor Fitzgerald settled with the CFTC for $700,000 over allegations the firm “allowed a shortfall in futures-customer funds.” In 2016, the Department of Justice entered into a non-prosecution agreement with CG Technology (an affiliate of Cantor Fitzgerald) which included a $16.5 million fine “to resolve a criminal investigation into the company’s past involvement in illegal gambling and money laundering schemes.”The Securities and Exchange Commission settled a case with Cantor Fitzgerald in 2020 for $3.2 million based on allegations Cantor Fitzgerald provided “the SEC with incomplete and inaccurate securities trading information.” In 2023, the SEC fined Cantor Fitzgerald $1.4 million for not properly reporting large traders. Soon after Lutnick was nominated for Commerce Secretary, the SEC announced it had fined Cantor Fitzgerald $6.75 million over allegations the firm had violated securities law.
In the past several years, Cantor Fitzgerald has also become a player in the cryptocurrency industry. Starting in 2021, the firm has assisted the cryptocurrency Tether “manage the giant stockpile of U.S. Treasuries that back its USDT stablecoin.” On October 25, 2024, *The Wall Street Journal *reported that the Department of Justice launched an investigation into Tether for potentially breaking money laundering laws and facilitating sanctions evasion. The crypto currency is reportedly “a vital financing tool for several of the U.S.’s top national-security concerns,” including organized crime and terrorist groups.
Following Lutnick’s nomination, The Wall Street Journal reported that Cantor Fitzgerald was involved in promoting several SPAC business deals that later went bust. A SPAC, or a Special Purpose Acquisition Company, “is a company formed to raise money through an initial public offering so it can later purchase or merge with an existing company.” One example includes Lutnick’s promotion of an SPAC deal for the startup AEye in 2021, which has lost almost all its value as of this writing.