Commerce Secretary Howard Lutnick is formally relinquishing his ownership stake in Cantor Fitzgerald, part of a broader divestiture of interests across affiliated companies in accordance with a federal ethics agreement.
In a move announced Monday, Cantor Fitzgerald stated that Lutnick, its former chairman and chief executive, has transferred his ownership to trusts established for the benefit of his adult children.
The trusts will be overseen by Brandon Lutnick, who now serves as chairman and chief executive, with his brother Kyle Lutnick holding the role of executive vice chair.
According to the firm, the current executive team will continue operating as is, while private investment firm 26North and Oak Hill Advisors founder Glenn August have joined as minority stakeholders.
“Kyle and I are honored to continue building on our father’s legacy, leading Cantor Fitzgerald alongside the exceptional executive team we have in place today,” Brandon Lutnick said in the company’s official statement Monday.
The leadership shift cements Brandon Lutnick’s role as a rising figure within the firm. Named chairman in February following his father’s cabinet confirmation, he has taken a prominent role in partnerships, including a recent initiative in the digital asset space. Cantor’s announcement also formalized the appointment of co-chief executives Pascal Bandelier, Sage Kelly and Christian Wall.
The equity transfer is part of a broader set of transactions that will remove Howard Lutnick’s economic, voting and ownership interests across Cantor Fitzgerald, BGC Group, and Newmark Group, which took effect Friday on May 16.
BGC Group said Monday it would repurchase over 16.4 million shares from Lutnick for $151.5 million. According to the Wall Street Journal, the shares will be bought back at approximately $9.21 per share, based on the volume-weighted average price of the stock on May 14, 15 and 16. In a parallel deal, Newmark Group will repurchase 11 million shares from Lutnick for $127 million, at around $11.58 per share, in line with its May 17 closing price.
News of the share sales has travelled quickly to make headlines across the pond, with the Financial Times noting it would put $361 million in motion. The UK publication also noted that Lutnick will not face immediate tax consequences under rules that permit executive divestitures without triggering capital gains, provided proceeds are reinvested in qualifying instruments.
“Today marks an exciting and meaningful chapter in Cantor Fitzgerald’s storied history,” Kyle Lutnick said in the company statement.
Though Howard Lutnick is stepping back financially, Cantor Fitzgerald remains the controlling shareholder in both BGC and Newmark. The moves appear designed to satisfy longstanding government ethics obligations without disrupting control of the affiliated entities.
The use of family trusts and corporate buybacks is not uncommon for high-ranking government officials transitioning from private-sector leadership. As noted by the Times, former Treasury Secretary Hank Paulson, who helped steer Wall Street through the 2008 financial crisis with bailout packages for banks, divested nearly $500 million of Goldman Sachs shares in 2006 under a similar provision after joining the Bush administration.
“Having the support of these world-class investors underscores the confidence in our management team and growth strategy,” Brandon Lutnick said Monday.
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