Trump’s Commerce Secretary likes tariffs. His former investment banks are betting on them
Cantor Fitzgerald, a financial services firm led by the son of U.S. Commerce Secretary Howard Lutnick, is betting investors that President Donald Trump’s signature tariffs will be lowered in court. The company’s investment banking subsidiary Cantor Fitzgerald & Co. Traders said they had the ability to buy hundreds of millions of dollars in potential refunds from companies that paid Trump’s tariffs, according to Wired’s filing.
Lutnick ran Cantor Fitzgerald for nearly 30 years until he was confirmed by the Senate in February, when he handed over control of the company to his sons Kyle and Brandon, both in their 20s. Since joining the Trump administration, Lutnick has become one of the most voiced supporters of the president’s tariff policy, saying it will raise “hundreds of billions of dollars” of revenue, ultimately eliminating American demand for Americans who pay their taxes for $150,000.
But the investment bank that made Lutnick a billionaire now makes certain clients bet that Trump’s tariffs will eventually be ruled illegal, at which point companies that paid their import tax could apply to deduct their money.
A Cantor representative saw in Wired said the company was willing to trade tariff rights at 20% to 30%. “So for a company that has paid $10 million, they may want to get $20-3 million in a deal,” the representative wrote. “Currently, we have the ability to trade as many as hundreds of millions of dollars and may increase this size in the future to meet potential demand.”
According to a letter viewed by Wired, Cantor has reached at least one major deal. “We have traded through Ieepa rights representing approximately $10 million and expect this number to expand in the coming weeks,” the Canto representative claimed.
Experts say these deals are a form of litigation financing, an increasingly popular investment category where financial companies try to make money from potential legal settlements. Many lawsuits can take years to resolve, a structure that allows individuals and companies to obtain currency in advance or cover their attorney fees. The gain is that investors can only pay a small portion of the fees that the plaintiff may eventually receive and make money by making the difference.
“It was Cantor Fitzgerald who asked some questions,” said Tim Meyer, a professor of international business law at Duke Law School. “It’s very interesting that the Commerce Secretary’s company is a company that bets on tariffs. It makes me very interesting and interesting and illustrates how people with government ties see the merits of tariffs.”
“Secretary Lutnik knew nothing about this decision because he had no insight or strategic control over Canto Fitzgerald,” wrote in a Wired press secretary Kristen Eichamer. “He has fully adhered to the terms of the ethical agreement on divestiture and retreat and will continue to do so.”
