Top Trump Official Under Investigation for Financial Crimes?!

0:00Leading Senate Democrats have started a new probe of Howard Lutnick, the Commerce Secretary's former family business, the one that's currently being run by his sons and led by Brandon Lutnick. I think he's 28 years old because Elizabeth Warren and Ron Wyden, the two ranking Democrats on the Senate Finance Committee, want to know more about what was reported last month that Cantor is betting against Donald

0:27Michael Popok:Trump and his tariffs by offering to buy, buy potential refunds from companies who are being overcharged on tariffs that are likely, as we have reported, likely to be struck down as an improper exercise of presidential power. So let's get this straight. Cantor Fitzgerald, a family business run by the family, the sons of the Commerce Secretary, where the Commerce Secretary has control over the tariffs, is betting against the tariffs. That was the reporting from a month ago in Wired magazine by offering to sell a instrument or a product to its counterparties, to its clients that would allow them to effectively sell their potential refunds for cents on the dollar, where Cantor would reap hundreds of millions of dollars.

1:15Michael Popok:And now Elizabeth Warren wants to know more about that. Michael Popak, and hopefully you want to know more about it here on the Midas Touch Network and on Legal AF. Okay, let's get to the story. What happened? Well, I did the report originally here on the Midas Touch Network about the instrument, the product that Cantor Fitzgerald was selling. Now look, Cantor Fitzgerald may no longer be run by Howard Lutnick any longer, but only by his two sons. However, it's also done an extraordinary job since the election at increasing its revenue. Now, people there say they're not getting inside information from Howard Lutnick, who recently departed and sold the business to his sons under a trust or whatever it is.

1:57Michael Popok:But, well, they know how Howard thinks. And so they're just doing things knowing what, it's almost like, what would Howard think? That's how they're doubling their profits. Does anybody really believe that? But in any event, then the announcement came that they are effectively betting against the Trump policies, which struck people as, you know, inappropriate, if not downright odd. Here's what the letter to Brandon Lutnick, chairman and CEO of Cantor Fitzgerald at 110 East 59th Street, says. Mr. Lutnick, we write regarding recent reports that your investment banking subsidiary, Cantor Fitzgerald & Co., has created a financial product for the purpose of betting on the outcome of litigation related to President Trump's tariffs.

2:40Michael Popok:Specifically, Cantor has created a litigation finance product that places the company in the position of betting that courts will strike down Trump's tariffs, given that one of your purported architects, one of the purported architects of President Trump's tariff policy He is Commerce Secretary Howard Lutnick, your father, and the former chairman and CEO of the company. These actions raise obvious conflict of interest and insider dealings concerns. And then they go on with the rest of it. And what they want is the following. This is on page two. How many tariff refund agreements have been drafted to date?

3:13Michael Popok:How many have been finalized? Is Canter or any affiliated entity, the counterparty in any tariff refund agreement? In other words, are they a participant? And if they aren't, which CANR entity is? Did CANR create the tariff refund agreements at the request of a specific client, or did CANR originate the agreements? Has CANR sold its rights under any of the agreements? Please provide the language used to assign potential refunds. Does the language in the tariff refund agreements with duty-paying companies, meaning those that had to pay the tariff, only apply to refunds as a result of litigation or to any potential refund as a result of any action?

3:49Michael Popok:Has anyone at Cantor or Cantor Fitzgerald communicated with any person within the executive branch, including President Trump, Secretary Lutnick, any individual employed by the Commerce Department about tariffs? That's a good question. Or about the court cases. We are concerned about the negative impacts of the tariffs and seek additional information regarding efforts by Cantor to profit from them. Sincerely, Ron Wyden, Elizabeth Warren, Ranking Members, Committee on Banking, Housing, and Urban Affairs, and Committee on Finance. Now, let me break this all down for you. And while you're here, hit the free subscribe button for Midas.

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5:25Michael Popok:Canter Fitzgerald is a financial services business. Full disclosure, I worked there a million years ago as global head of litigation for them, but I don't have any insider knowledge about what's going on there. I left a long time ago. Now, Cantor, as part of its business, has counterparties and conducts transactions and sometimes creates products. And the reporting from Wired Magazine that I relied on, and so did Elizabeth Warren and Senator Wyden, is that they decided to profit by selling a product where they, Cantor Fitzgerald, would buy cents of the dollar opportunities for people to get refunds on tariffs.

6:01Michael Popok:So let's say I thought I overpaid my tariffs by 10%, overpaid in tariffs 10%. And let's say that's$10 million. Well, Cantor would buy it from me for$1 or$2 million. And if the refund gets overturned, Cantor profits the extra$8 million. Do you see? They pay cents on the dollar. It's sort of like these companies that are out there buying your tax refund or other types of refund or your lottery winnings. You know, it's like that. It's like the viaticals business. So that was reported. And it was weakly denied, if at all, by Cantor Fitzgerald at the time. Just all the news reports about that is not accurate.

6:38Michael Popok:There's been a lot of news reports coming out of Cantor Fitzgerald that they're making money hand over fist, mainly because they're following what would Howard do as a model. That's what they want us to believe. Now, this comes out. I report on it. And we train our fire on it. And now it looks like they're no longer going to go into the business. Their new story is, well, we thought about it. We were approached by a counterparty to do it, but we ended up not doing it. That sounds like weasel words to me. And if it's true, then let them give full disclosure to the Senate. Let them trot down one of their executives to go and peer in front of a bank of microphones in front of Senators Wyden and Warren, and they can answer all those questions.

7:18Michael Popok:But that doesn't sound like an honest answer to me. Well, somebody came to us and they talked to us about doing this, but we thought better of it and we never did it. OK, I think I'll give you my version. The media, including Midas Touch and Legal AF, focused on the hypocrisy of Howard Lutnick's family business run by his sons profiting on going against Trump policy and the irony of that. And we weren't the only ones, but we were one of the leaders. And then it looked bad for Canter, who always is worried, as most financial services companies are, about their reputation, their brand issues. And so they thought, well, that looked a little too on the nose, a little too close.

8:10Michael Popok:Why don't we not do that anymore? And maybe that was killed by some executive committee within the company. But we have a right to know. And it looks bad. And it smells bad. What's the phrase for that? The optics are terrible. And let's get down to it. Howard Lutnick announced to the world when he sold off his company to his sons that he was very ethical. There are no conflicts of interest. He solved all the conflicts of interest. He turned the company over to his sons, the 28-year-old, the 27-year-old. And that's what we're supposed to believe. But I don't think the senators here, Wyden and Warren, should be focused on that.

8:47Michael Popok:I think they should be focused on getting real, true answers and determine if we have a real ethical conflict of interest and whether there's insider trading issues. And they're allowed to do that. And that's what senators do on those committees. So I'll continue to follow the probe of Kenner Fitzgerald, a family owned business that recently was owned and controlled by one Howard Lutnick, Commerce Secretary under Donald Trump. And because it's the right thing to do, I'll continue to follow it right here. While you're here, hit the subscribe button on Midas Touch. Slide over to Legal AF YouTube channel, do the exact same thing, and follow me on podcasts.

9:22Michael Popok:Legal AF, the podcast on Midas Touch Wednesdays and Saturdays. And my other podcast, The Intersection, Tuesday nights, 8 p.m. Eastern time, also on Midas Touch. I'm Michael Popok. Until my next report. In collaboration with the Midas Touch Network, we just launched the Legal AF YouTube channel. Help us build this pro-democracy channel where I'll be curating the top stories, the intersection of law and politics. Go to YouTube now and free subscribe at Legal AFMTN. That's at Legal AFMTN.