CFTC approves the Cantor Exchange, but wont approve its movie box-office prediction markets.

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CFTC has approved the Cantor Exchange&#8230-

&#8230-but won&#8217-t approve its movie box-office prediction markets.

Update.

CFTC Commissioner Bart Chilton on the Trend Exchange and the Cantor Exchanges movie box-office prediction markets

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CFTC Commissioner Bart Chilton on the movie box-office futures:

Via Max Keiser&#8230- who has this to say:

I’m glad Chilton brought this up.

When I was CEO of HSX – I shared a board seat with members who were also on the board of Lionsgate Films.

Lionsgate was constantly moving the prices of their films (or films they had an interest in, or a friend’s film) on HSX as a way to manipulate perception and marketing dollar spends.

This conflict blew up in the now famous Access Hollywood incident-
http://www.villagevoice.com/1999-11-16/news/access-denied/
I was stopped from reporting the real numbers on HSX on Access Hollywood and prices from that moment forward were controlled by people who whose interests lay with the studios.

I went to war with the rest of the board to defend my creation, and my technology, and all the IP that is HSX/Cantorx – board members included Citibank and NBC who sided with the studios – in allowing the prices on HSX to be moved per ‘marketing’ requests made by the studios. This lead to a blowout on the board and my leaving HSX as a result.

Shortly thereafter, the same dissident board members engineered the deal with Cantor for HSX – that has yet to be consummated. None of the investors who put $40 mn. into HSX have ever seen a penny from Cantor. There is no paper trail that links Cantor to HSX. Cantor claims everything was lost on 9/11.

Now – they hope to take the studio/wall st. collusion to the next level via Cantor Exchange. Bart Chilton is right to be suspicious of this. Will they really due their due diligence? Doubtful. This is Wall St. we’re talking about.

Personally, I put 95% of my wealth in gold bullion 8 years ago – so to be clear – another blowup of another exchange will only drive the price of gold higher – so I am half-wanting to see this catastrophe unfold.

Previously: Why the CFTC won’t approve the Cantor Exchange and the Trend Exchange’s prediction markets on movie box office

Why the CFTC wont approve the Cantor Exchange and the Trend Exchanges prediction markets on movie box office

Product approval (see below) is a different question from exchange approval (blogged previously by Mike Giberson).

Bloomberg:

CFTC Commissioner Bart Chilton called it a a€?popcorn prediction market,a€? […]

Hollywood studios that participate by hedging their filmsa€™ prospects will doom ticket sales, said Peter Guber, chairman and CEO of independent production company Mandalay Pictures LLC.

a€?The word will get out in three seconds and the picture will be a complete catastrophe,a€? said Guber, who was chairman and CEO of Sony Pictures Entertainment in the early 1990s. […]

a€?We have serious concerns regarding the trading of media contracts and we support a very thorough review of all of these first-of-a-kind products,a€? CFTC Commissioner Scott Oa€™Malia said in an e-mailed statement.

U.S. Senator Blanche Lincoln, an Arkansas Democrat, today added language banning trade in movie futures to a broader derivatives bill she is writing. Lincoln is chairman of the Agriculture Committee that oversees the commodity commission. […]

Activity on the exchanges would bring about a€?risky and manipulativea€? behavior, said Patrick Leahy, the Vermont Democrat who heads the Senate Judiciary Committee, and Senator Orrin Hatch, a Utah Republican.

a€?Ia€™m worried about manipulation,a€? Chilton said in an interview on Bloomberg Television before the vote.

Why Hollywood Doesnt Want You Betting on Hollywood

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http://www.vanityfair.com/online/oscars/2010/04/why-hollywood-doesnt-want-you-betting-on-hollywood.html

“It is clear that the MPAA is not familiar with the futures markets or the regulatory framework within which they operate.

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The Futures Industry Association:

No one can argue that the movie-making business is without risk or that there is no need for effective risk management tools. The potential introduction of innovative instruments for managing that risk should be applauded rather than criticized.

Via Max Keiser

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.

The Motion Picture Association Of America (MPAA) comes out as fiercely against movie business futures.

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On the ground of insider trading.

Keywords: CFTC &#038- Cantor Exchange.

Via Max.