May 6, 2021


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Wall Street broker BGC Partners files lawsuit over alleged theft of $ 35 million

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BGC Partners, the interdealer broker, has taken legal action against two former partners after discovering what it called a theft of $ 35.2 million on funds the company set aside for tax payments United Kingdom.

The Wall Street firm, which is run by Howard Lutnick, initially warned that funds were lacking when releasing fourth quarter results last week, but the disclosure was not reported.

The alleged theft occurred over several years until September of last year, BGC said in its findings report, adding that it first identified it last quarter and that it did not did not imply “the operations or activities of the company”.

The group, which has more than 5,000 employees, added that it “expects to recover most or almost all of the stolen funds through a combination of insurance and asset restitution through litigation.”

Lutnick described it as “an unfortunate event” on a subsequent earnings call with analysts, but said the loss was not significant. However, the company said its financial figures for 2019 and the first three quarters of last year have been revised to reflect the loss.

BGC declined to comment further, especially if it had reported the incident to law enforcement authorities. City of London Police, who handle most white-collar crime in the UK, said on Tuesday they had not opened a case related to the incident.

The alleged theft is a blow to Lutnick, who has forged his reputation and fortune in the difficult world of business-to-business brokerage in which BGC acts as a middleman between investment banks buying and selling derivatives.

Lutnick pioneered electronic trading in the US bond market in the 1990s, but had to rebuild the company, then part by Cantor Fitzgerald, after being devastated by the attack on the World Trade Center in 2001.

Shares of BGC, which is headquartered in New York but has a large office in London, have started a rally after falling when the pandemic first struck last year.

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