The Financial Industry Regulatory Authority fined Cantor Fitzgerald & Co. US $6 million and required disgorgement of almost $1.3 million in commissions and interest in connection with the firm’s selling of more than 73.6 million shares of microcap securities, allegedly without conducting adequate due diligence, from March 2011 through at least September 2012. According to FINRA, during the relevant time, Joseph Ludovico, the broker who handled these transactions for the firm, effectuated the relevant transactions without considering “red flags” that suggested the transactions might be “illegal, unregistered distributions.” Among other things, after depositing microcap securities in their accounts, customers immediately liquidated the securities and wired the proceeds away from the firm. In fact, a portion of the relevant sales involved shares that were neither registered with the Securities and Exchange Commission nor lawfully exempt from registration. FINRA also alleged that Cantor Fitzgerald failed adequately to supervise the relevant transactions and did not have an anti-money laundering program that adequately identified and reported suspicious transactions. FINRA claimed that, despite servicing mostly institutional clients, the firm, began in March 2011, to service a small number of customers who liquidated large volumes of microcap securities without ensuring that the firm’s existing supervisory structure would comply with applicable securities laws. FINRA said that Jarred Kessler, Executive Managing Director of Equity Capital Markets for Cantor Fitzgerald, sought to expand this business in December 2011 knowing "that it posed unique challenges" given the firm's existing business mix. Cantor Fitzgerald consented to the sanctions to resolve this matter. In addition, to resolve charges against them, Mr. Kessler agreed to pay a fine of US $35,000 and be suspended as a supervisor for three months, while Mr. Ludovico agreed to pay a fine of US $25,000 and be suspended in all capacities for two months.