Facing movie futures trading ban, Cantor axes analysts
(Updated, 6:04 P.M., PST) A spokesperson for Cantor Fitzgerald confirmed to TheWrap that the company laid off the entire staff of the Hollywood Stock Exchange (HSX.com).
Hollywood Stock Exchange (HSX.com) laid off the majority of its staff on Thursday, TheWrap has learned.
The move comes as HSX's parent company Cantor Fitzgerald's long-gestating plans to sell shares of box-office earnings hit a legislative roadblock last week. Bowing to pressure from big studios, the House of Representatives and Senate have included a ban on movie box-office futures trading in their proposed financial reform legislation.
On Monday, shortly after getting federal approval for Cantor's trading plan, exchange president Richard Jaycobs admitted that congressional action will prevent the company from moving forward.
"Cantor Exchange wishes to express its appreciation to the hundreds of motion picture professionals who advocated for box office futures contracts, including all those who publicly Jaycobs their support and those who wrote letters of support to the CFTC and members of Congress," he said in a statement.
"We are, however, aware that a bill reported out of the House-Senate conference last Friday continues to include a provision banning box-office receipts as the basis of any futures contract. In light of this pending legislation, Cantor is continuing to assess its options for providing risk management and financing tools to the motion-picture industry."
Two former HSX employees told TheWrap that most of the employees were laid off on Wednesday and Thursday. The staff was described as "skeletal." Employees were informed Thursday morning that they would be let go.
Nonetheless, the 14-year-old website for amateur betters on Hollywood movies appeared to be functioning normally.
Cantor purchased the Hollywood Stock Exchange in 2001. It has since spent tens of millions of dollars trying to turn the popular website, which allowed users to make predictions on box office returns with fake money, into a legitimate exchange.
It began the regulatory process in 2008 and announced their intentions to allow movie studios and individuals to place bets on the box office performance of Hollywood blockbusters.
After Cantor announced its intentions, the Motion Picture Association of America and all of the major movie studios — with the exception of Lionsgate – came out strongly against the proposal, charging that it created opportunities for insider trading.
Despite the opposition, Cantor and another trading exchange Media Derivatives both received approval from the Commodities Future Trading Commission to begin trading. After the initial approvals, the Senate inserted a ban into its financial reform legislation. That ban is now part of the combined House and Senate that was expected to pass until Senator Robert Byrd died last weekend.
Calls to Hollywood Stock Exchange were not immediately returned. The company's main number went to voice mail. A spokesperson for Cantor did not immediately respond to request for comment.