Lutnick Pledges To Sell Firm, Discloses Its Bond With Tether

(Bloomberg) - Howard Lutnick, President Donald Trump’s pick to run the Commerce Department, said in his Senate hearing that he plans to sell all his business stakes if confirmed and for the first time acknowledged a bond his firm has with a controversial cryptocurrency client.

“I will sell all of my interests, all of my business interests, all of my assets, everything,” the longtime chief executive officer of Cantor Fitzgerald LP said Wednesday. “Upon confirmation, my business will be for sale,” he said, adding he will do so in 90 days.

During the hearing, where few senators asked critical questions, Lutnick, 63, didn’t say anything further about who might buy his firm, the continuing stakes held by family members or if he has buyers lined up already.

The billionaire can defer capital gains taxes for assets he’s required to sell to avoid conflicts of interest, meaning if he draws money from the sales of his firms, he could plow it into a fund and only pay taxes when and if he sells those portfolios.

He added that Cantor Fitzgerald, which has faced criticism for its relationship to controversial cryptocurrency firm Tether Holdings Ltd., has a convertible bond with the company. That arrangement means Cantor is able to draw a coupon and obtain shares in the issuer if certain terms occur.

Sitting behind him during his hearing was his son Brandon, who was recently named CEO of one of Cantor’s special purpose acquisition vehicles and has spent time working with Tether in Switzerland.

Senator Elizabeth Warren, a Massachusetts Democrat who isn’t on the Commerce Committee, has pressed him on connections he and Cantor Fitzgerald have with the cryptocurrency company, which authorities allege has been used by criminal gangs, cartels, terrorists and scammers to move money.

“Tether did no business with anyone that wasn’t KYC-appropriate,” Lutnick said during the hearing, using an abbreviation for “know your customer,” adding issues were isolated to the secondary market.

Financial Holdings

The combative billionaire has one of the more complex financial situations among Trump cabinet nominees after a three-decade career running US and international firms.

Lutnick disclosed roles in at least 800 entities, assets worth at least $806 million — including 12 he valued at more than $50 million — and income of at least $356 million over 2023 and 2024.

While he said he’ll divest from his stakes, the future control and ownership of his firms, which he’s long run with a tight grip, have been subject to speculation.

In an ethics agreement in November, Lutnick said he would step down from his role at Cantor Fitzgerald if confirmed. He also vowed to divest interests from the financial services company, as well as property firm Newmark Group Inc. and brokerage BGC Group Inc.

In the hearing, Lutnick also pushed back against a report by the New York Times, raised by Minnesota Democrat Amy Klobuchar, which highlighted a multimillion-dollar stake by Cantor Fitzgerald in Critical Metals Corp., which aims to start mining metals and minerals in Greenland — a territory that Trump has said is a “necessity” for the US to purchase.

The CEO said that the stake was tiny in the context of his business empire and that it was in return for helping take the company public. He added that he wasn’t even aware of the stake until this week.

Tariffs and Trade

Trump has tapped Lutnick to lead his “tariff and trade agenda” at Commerce, as well as taking “direct responsibility” for the US Trade Representative. He was a staunch Wall Street ally throughout Trump’s campaign, helping the president wrangle millions at fundraisers and eventually co-chairing his transition team.

While Trump hasn’t officially imposed any tariffs, he has charged Commerce, along with the Treasury Department and the USTR, to undertake more than 20 studies of America’s trade relationships and polices, possible precursors to protectionist measures he’s threatened.

Lutnick said in the hearing that he prefers “across-the-board” tariffs and on a “country-by-country” basis. “We can use tariffs to create reciprocity, fairness and respect,” he said.

The Commerce Department broadly promotes American businesses and economic growth. Under President Joe Biden’s Commerce Secretary, Gina Raimondo, it allocated billions of dollars in grants and loans to bolster domestic chip manufacturing, a policy Trump has criticized.

Lutnick said during the hearing that the initiative is an “excellent down payment,” and that officials should review those investments.

The department is also in the spotlight over its management of US semiconductor export controls intended to stall China’s development of artificial intelligence. Recently unveiled powerful AI software from Chinese startup DeepSeek has raised questions about the effectiveness of those curbs. Trump has also asked the Commerce and State departments to review the US export control system.

By Daniel Flatley and Todd Gillespie
With assistance from Derek Wallbank, Alicia Diaz, Bill Allison and John Harney

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