Ex-Cantor Fitzgerald traders used commission-splitting scheme: suit

Two former stock traders at Cantor Fitzgerald cooked up a secret commission-splitting scheme over more than a decade in order to get around internal controls and line their pockets, according to a lawsuit filed by federal regulators on Friday.

The Securities and Exchange Commission accused Adam Mattessich and Joseph Ludovico — as well as an un-named junior trader — of secretly pooling their clients to beef up their commissions from 2003 to 2014.

A second SEC action, an administrative proceeding, against Cantor was settled. The regulator investigated the firm for failing to keep the proper paperwork on the two traders.

The SEC action was settled with Cantor agreeing to pay a $1.25 million fine. Cantor did not admit or deny the claims. A company spokeswoman declined to comment.

The scheme started after a supervisor denied a request by Mattessich to change his pay structure so he received a cut of sales commissions, according to the complaint, filed in Manhattan federal court.

To get around the rules, Mattessich gave his account to Ludovico and the other, unidentified trader, who did get commissions on sales — with the promise that the two kick back half of those commissions through off-the-books personal checks, the SEC claims.

Cantor found out about the scheme in 2014, but didn’t show them the door until earlier this year, the SEC claims.

The alleged deal was lucrative. In 2013 alone, Mattessich made $58,200 in kickbacks from Ludovico, the SEC claims.

Ludovico couldn’t be reached for comment. A lawyer for Mattessich denied the claims .