According to FINRA, Cantor Fitzgerald & Co., a New York-based broker-dealer, was censured and fined $225,000 (with $73,000 payable to FINRA) for filing untimely and inaccurate notifications in connection with securities distributions subject to Regulation M.

Regulation M is designed to prevent manipulation during securities offerings by requiring firms to notify regulators about their participation in distributions. These notifications help ensure market integrity during sensitive offering periods.

The firm's violations were extensive. FINRA found that Cantor Fitzgerald submitted untimely restricted period notifications, with delays ranging from one to five days in most cases. However, some filings were significantly more delayed—one notification was 55 days late, and another was a staggering 1,068 days late.

Beyond timing issues, the firm also submitted inaccurate notifications. When new distribution participants joined offerings after initial notifications were filed, the firm failed to amend its filings. Instead, the firm only provided complete participant lists in its trading notifications, which violated the requirement for accurate restricted period notifications.

Trading notifications were similarly problematic, with submissions ranging from one to 55 days late and failing to identify all distribution participants.

Perhaps most concerning, FINRA found that Cantor Fitzgerald failed to establish and maintain a supervisory system reasonably designed to ensure compliance with Regulation M notification requirements. The firm's written supervisory procedures did not describe how to review notifications for timeliness or accuracy, and no reviews were actually conducted.

Following the investigation, the firm implemented a new process to review Regulation M-related notifications and amend restricted period notifications when necessary.

This case serves as a reminder that compliance with regulatory notification requirements is not optional. Firms must have robust supervisory systems in place to ensure timely and accurate filings, particularly during securities offerings where market manipulation concerns are heightened.