Cantor Fitzgerald Accuses Data Firm of ‘Extortion’ in Lawsuit

Cantor Fitzgerald sued the firm that hosts some of its “most critical and sensitive data,” claiming IT Convergence Inc. tried to “extort” money from it.

According to a lawsuit filed Wednesday in New York state court, Cantor sought to migrate its data to Oracle Corp. from ITC, which had hosted it since 2013, starting on June 1. The data includes financial books and records for Cantor and affiliates including Newmark Group and BGC Group.

Instead of cooperating, ITC “seized the opportunity to extort Cantor” by demanding an immediate wire transfer of more than $700,000 “in invented costs and fees that Cantor never owed,” the suit alleges.

“Because Cantor had no alternative, it gave into ITC’s extortion,” the Wall Street firm said in its suit.

$17,000 Rehearsals

ITC didn’t immediately respond to a request for comment. Cantor is seeking the return of $761,400 it paid to ITC, as well as almost $2.3 million in damages.

Cantor says it decided to switch to an Oracle platform when its ITC contract expired in mid-2024. As preparation for this transition, the firm wanted to rehearse the process, “just as actors and technicians rehearse a play many times before opening night.”

According to the suit, Cantor viewed the rehearsals as work covered by the its contract with ITC. But the data services provider said it would only participate in the rehearsals if it was paid $17,000 for each one, Cantor said.

After three rehearsals, Cantor says it told ITC on April 30 that it planned to begin the full backup on May 17. ITC allegedly responded that, due to maintenance, no one at the data firm could release Cantor’s data then.

“Upon information and belief, this representation was false,” Cantor claims.

Renewal Deadline

ITC tried to push the backup to May 31, which Cantor says was problematic because the data needed to be in place in time for its affiliates to prepare their quarterly filings. Moreover, Cantor says that date was also the deadline for it to renew or not renew its ITC contract for another year.

According to the suit, ITC offered to produce the backup on May 17, as originally requested, but only through a cloud backup that would cost $250,000. ITC also demanded an extra $460,000 before it would produce the backup.

“Faced with no other way to avoid a significant disruption to the business of its affiliates, Cantor made the extortion payments, wiring ITC a total of $710,000,” according to the filing.

But the firm said it made clear to ITC that it didn’t believe the money was actually owed. Cantor said one of its lawyer wrote to ITC on May 17 promising to bring legal action.

Top photo: Ethernet cables connect into a server at ’42 Wolfsburg’, the Volkswagen AG (VW) sponsored coding school, in Wolfsburg, Germany, on Thursday, March 11, 2021. Volkswagen’s software strategy — involving more than $30 billion in investment and multiple projects and partnerships — is critical to catch up to Tesla Inc. and counter the risks posed by Apple Inc. and Alphabet Inc. Photographer: Stefanie Loos/Bloomberg.