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Mobile and in-play betting and gaming technology solutions provider Cantor Gaming and Wagering is being sued in a New York court by the bankruptcy estate of collapsed futures broker Refco Incorporated.
Being represented by financial litigation law firm Grant and Eisenhofer, Refco and its bankruptcy estate representative Marc Kirschner allege that Cantor Gaming and Wagering, which is an affiliate of the global financial services company Cantor Fitzgerald, acquired proprietary technology and other assets from one of its subsidiaries without paying compensation.
The action filed in the US District Court for the Southern District of New York before Judge Ronnie Abrams contends that Refco invested $8m in Cantor Fitzgerald subsidiary Cantor Index Holdings in 2002 in exchange for a 10% partnership interest. Over the next several years, the plaintiffs argue that this subordinate developed successful gaming technology such as devices for remote gambling and other betting techniques.
The action contends that Cantor Gaming and Wagering then shut Cantor Index Holdings before taking procession of its key assets and intellectual property for its own development and profit. The suit alleges that this was done without properly compensating the subsidiary, which would have seen Refco receive a share.
The complaint also contends that Cantor Gaming and Wagering has repeatedly admitted to regulators, analysts and the press that the technology developed by Cantor Index Holdings and its subsidiaries in the UK was critical to the build-out of its Nevada operations.
The plaintiffs are seeking millions of dollars in compensatory and punitive damages and have named Cantor Fitzgerald CEO Howard Lutnick and Cantor Gaming and Wagering president Lee Amaitis as defendants.
“Cantor drained Cantor Index Holdings of its assets and then co-opted the intellectual property for its gambling businesses,” said Jay Eisenhofer, co-managing director for Grant and Eisenhofer.
“The brazenness of the Cantor scheme is illustrated in the sham transaction valued at barely a dollar and the company’s public admissions that significant capital was put into developing remote gambling technology key to Cantor’s Nevada businesses.
“The company still owes its subsidiary and indirectly Refco’s bankruptcy estate for these technologies and other assets which Refco helped finance a decade ago. Cantor Entertainment Technology’s success in the mobile gaming industry and its potential IPO rely heavily on these technologies and we seek recovery for the bankruptcy estate the fair value of Refco’s investment.”