"giant series of ifs" ...``dream'' ... defence to come
+------------------------------------------------------------------------------+
Cantor's Lutnick Tells Court U.K. Carbon Business Made No Money
2010-07-21 13:16:45.235 GMT
By James Lumley
July 21 (Bloomberg) -- Howard Lutnick, chairman of Cantor
Fitzgerald LP, said that its U.K. carbon credits brokerage was a
money-losing failure, with business projections based on dreams.
Cantor is suing Stephen Drummond, a former executive at the
brokerage, in London for the return of $2 million it says it
lent him while he was running the unit, CantorCO2e. Drummond is
countersuing, claiming he was wrongfully dismissed in 2009 for
failing to tell the company he was in talks with a competitor
about a job.
Lutnick said on the witness stand today that since Drummond
left, Cantor has been trying to turn Drummond's operation into
revenue.
"We can't figure out how to make money from it," he said.
"The pipeline that Mr. Drummond talked about was a dream. None
of Mr. Drummond's projections came true." The business was
built on a "giant series of ifs," he said.
CantorCO2e this year closed its London desk and shifted its
business to the U.S., where it is hiring additional workers, as
brokers lost share in the market for carbon permits and credits
to the European Climate Exchange in London, the biggest bourse
for emissions trading.
CantorCO2e and EcoSecurities, the competitor Drummond was
in discussions with, both manage projects that receive Certified
Emission Reduction credits under the 1997 Kyoto Protocol.
JPMorgan Chase & Co. bought the carbon business EcoSecurities
last year for about $200 million. Drummond and Carlton Bartels
formed CO2e.com in 2000 and merged it with Cantor's
environmental brokerage in 2007, according to a company website.
The cases are: Cantor Fitzgerald LP v. Stephen Drummond and
Stephen Drummond v. CantorCO2e Limited.
For Related News and Information:
Bloomberg energy stories: TOP NRG <GO>
Carbon-dioxide emission permit prices: EMIT <GO>
For top legal stories TLAW <GO>
Legal news and filings: BLAW <GO>
--Editors: Christopher Scinta, Anthony Aarons.
To contact the reporter on this story:
James Lumley in London at +44 20 7073-3684 or
Jlumley1@bloomberg.net
To contact the editor responsible for this story:
Anthony Aarons at +44-20-7673-2227 or aaarons@bloomberg.net.
