Allegations about Cantor Fitzgerald, the Hollywood Stock Exchange and the Cantor Exchange

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Please, note that these allegations are made by left-wing people. Midas Oracle has not checked and does not endorse these allegations.

News Dissector:

HOLLYWOOD: THE NEXT TARGET FOR SUBPRIME SPECULATION

Mother Jones has the story:

The Wall Street wizards who gave you credit default swaps want to turn the movie industry into their next casino — By Nick Baumann

If you thought the mortgage-backed securities and other complex financial instruments that crashed the economy were risky, you’ll love Wall Street’s latest brainwave: a new financial market in which players can gamble on whether upcoming Hollywood movies will be blockbusters or bombs.

For years, Cantor Fitzgerald, a Wall Street investment firm, has been operating the “Hollywood Stock Exchange,” a fake-money game in which players trade “stocks” to bet on how films will do at the box office. Now Cantor could soon get government permission to make a real-money version of the game—a market in which players can gamble on the success or failure of, say, Pirates of the Caribbean 4. Critics are worried that this new market could be vulnerable to insider trading and create bizarre incentives for moviemakers—and that it will also enlarge the risky family of financial products that helped trigger the economic crisis. [More here >]

Last week, I carried a report that Cantor Fitzgerald, the firm that lost many people in the World Trade Center collapse, has been up to some shady business but I have been told there are many questions still unanswered about this firm. Below, a confidential report on the shenanigans, according to a source I trust:

CONFIDENTIAL

Cantor Fitzgerald has not yet paid the HSX Holdings Inc. shareholders a penny for the “deal” that transpired in 2001.

Background:

A “transaction” occurred in 2001 &#8211- that transferred HSX Holdings Inc. voting rights to Cantor &#8211- giving the hundreds of investors &#8211- who invested $40 mn. dollars into HSX from 1996 &#8211- exactly NOTHING.

When queried by lawyers, Cantor claims they lost all the paper work in the 9/11 attacks (they moved the company from Santa Monica Ca. to the top floor of the WTT during the Spring of 2001).

What I know is that a board member of HSX &#8211- Woody Knight of SBS (Scandinavian Broadcasting Service) &#8211- engaged in a pre-arranged, third party transaction that passed voting control to Howard Lutnick at Cantor &#8211- in exchange for $2 million in eSpeed stock (Cantor’s publicly listed entity at the time) that was immediately sold to ‘wash’ the sale.

Cantor is now going to launch ‘box office futures contracts’ based on intellectual property and technology they don’t have the rights to &#8211- with the blessing of the CFTC.

According to my sources who are close to this &#8211- the CFTC &#8211- run by Gary Gensler &#8211- a former Goldman guy (of course) &#8211- took 25 mn. in ‘lobbying’ fees from Cantor to get these new contracts green lit. But did they do any due diligence? Did they spot the absence of any bona fide transaction between HSX and Cantor?

Does the world really need more weapons-of-mass-financial- destruction from the sickos on Wash. and the CFTC?

Why should we assume that Cantor will operate this market honestly when the circumstances of their “ownership” including the patented “Virtual Specialist” technology used for online CDA (Continuous Double Auction) technology, are dubious at best, if not outright fraud.

Will anyone be able to resist these new products that combine tinsel with wall st.?

Is this the new bubble the CFTC hopes will take people’s mind’s off the current spate of fraud on Wall St.?

Also, can you think of a market that is any easier to manipulate by insiders?

We understand that a former CEO of HSX got calls from people like Jeffrey Katzenberg asking to move prices of their projects up to change the perception in the market place (and media) and to free up more marketing dollars.

Just one example of many, many ways to game this market.

History of BetFair, from the concept to the startup -in Andrew Black and Edward Wrays own words

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I already linked to it, but you should re-read the 2008 TIME interview of BetFair&#8217-s two founders.

Awesome literature, if you are an entrepreneur.

Take 10 minutes today to read that.

GREAT NEWS: Stephen Burn is now the big boss at BetFair USA [*], and Gerard Cunningham is out. – [VIDEO]

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BetFair won&#8217-t release any public press release on all this, but they told me what&#8217-s on this site is accurate: Stephen Burn (previously director of horse racing) is taking over BetFair US leadership, including TVG.

We have decided that the strategy for the U.S. is to enhance our horse racing offerings and to support our global product development initiatives and therefore, at this point, Betfair wants the U.S. horse racing and engineering teams to integrate more closely with [United Kingdom] operations. Given these changes, Gerard decided to leave the company to pursue alternative opportunities.

More info:

Stephen Burn will now run Betfair’s US horseracing business and Los Angeles office, reporting to Betfair’s UK-based managing director of exchange, Mathias Entenmann.

Ravi Keswani will continue to run the US engineering and product management teams and assume responsibility for the San Francisco office, reporting to Betfair’s London-based chief technology officer Tony McAlister.

If you wanna know what Stephen Burn looks like, here&#8217-s an old video:

MY VIEWS: Some years ago, I e-mailed Stephen Burn (2 or 3 times) for info on BetFair (not knowing that he was not in the PR department), and he graciously forwarded each e-mail to right person at BetFair (instead of killing them, wrong recipient), and my requests got always satisfied. So, to me, the chap sounds like a nice gentleman. As for Gerard Cunningham, I was told by one betting exchange industry insider that he was not very enlightened.

[*] Technically, David Yu is the upper boss at The Sporting Exchange USA, if I remember well. Go to http://corporate.betfair.com/ for more info. (Well, actually, you won&#8217-t find that info there. :-D Their corporate site is quite elliptic.)

In the universe of Steve Jobs, personal vision trumps the wisdom of the crowd. Hes ready when he thinks were ready.

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New York Times:

Great products, according to Mr. Jobs, are triumphs of “taste.” And taste, he explains, is a byproduct of study, observation and being steeped in the culture of the past and present, of “trying to expose yourself to the best things humans have done and then bring those things into what you are doing.”

His is not a product-design philosophy steered by committee or determined by market research. The Jobs formula, say colleagues, relies heavily on tenacity, patience, belief and instinct. He gets deeply involved in hardware and software design choices, which await his personal nod or veto.

I am filing this post in the &#8220-INDIVIDUAL INTELLIGENCE &#8211- ANTI CONSENSUS&#8221- category (opposing the &#8220-COLLECTIVE INTELLIGENCE &#8211- WISDOM OF CROWDS&#8221- category) &#8212-following a remark I made privately to David Pennock, Mike Giberson and Mike Linksvayer.