(Bloomberg) - Former top Cantor Fitzgerald LP equities trader Adam Mattessich knew the firm had to keep detailed records on compensation but went ahead anyway with a secret plan to share other traders’ commissions for over a decade, an SEC lawyer told a jury.
In closing arguments in Mattessich’s trial in Manhattan federal court on Tuesday, Securities and Exchange Commission lawyer Lee Greenwood pointed out that, as a desk head and Cantor’s onetime co-head of equities, Mattessich was responsible for the compliance of other traders.
“He enforced those rules against other people but he violated those rules himself to line his own pockets with tens of thousands of dollars of off the book payments,” Greenwood said.
Mattessich, who resigned from Cantor in 2018, has been on trial since last week in an SEC lawsuit accusing him of aiding and abetting the firm’s violation of its requirement to keep records of which trades are attributable to which employees for compensation purposes. According to the SEC, he did so by accepting personal checks from traders who paid him half their commissions from certain accounts, starting in 2002. One trader paid him at least $58,000 in 2013 alone.
Cantor paid a $1.25 million fine in 2018 to resolve an SEC probe without admitting or denying wrongdoing.
Mattessich doesn’t deny the conduct but claims the firm’s equities division had a permissive culture in which such arrangements were “open and notorious,” and traders received no compliance training to suggest they were not allowed. He has argued that he was specifically given permission by the firm’s former equities capital markets chief, Phil Marber, to split commissions.
Several traders testified at the trial, mostly backing Mattessich’s view that there was no reason to think the arrangement was impermissible until 2014, when Cantor’s compliance chief issued a memo on the subject.
Denis Kelleher, a lawyer for Mattessich, pointed to their testimony in closing arguments for the defense.
“They weren’t hiding it,” he said. “They weren’t meeting in the men’s room and there was no cash. Even Cantor behaved for years as if nobody had done anything wrong.”
The case is SEC v Mattessich, 18-cv-5884, U.S. District Court, Southern District of New York (Manhattan).
By Chris Dolmetsch
