Cantor Fitzgerald's Investment Banking Push Goes Awry

Steven Kantor, then head of investment banking for Cantor Fitzgerald, gathered his staff about a year ago for a holiday party in his 82nd-floor apartment in Trump World Tower. Kantor had stepped up his hiring in prior months, and the bankers discussed the renewed push into underwriting and merger advice while drinking Avión, a tequila in which Kantor personally invests, according to five guests. Within about 10 weeks, more than half of his 50 bankers had been fired or reassigned. In August, Kantor was gone, too—transferred to Cantor Commercial Real Estate, a venture he helped create.

Chief Executive Officer Howard Lutnick’s drive to turn Cantor Fitzgerald, one of the largest independent U.S. brokerages, into a rival to Wall Street’s investment banks has been pocked with dismissals and defections. Industry records show that 41 percent of the 158 traders and bankers whose hiring Cantor announced in news releases from 2009 through 2012 have left.