More class actions against Global Brokerage (FXCM) set for consolidation

The New York Southern District Court has become the arena where class actions against Global Brokerage Inc (NASDAQ:GLBR), formerly known as FXCM Inc, have been taking place. A number of these lawsuits have already been combined into a single one, with another combination on its way, as FinanceFeeds has found out from the latest court filings.

The case captioned Murrah v. Forex Capital Markets, LLC et al (1:17-cv-03700) was voluntarily dismissed on June 1, 2017, without any prejudice against all Defendants, including Forex Capital Markets LLC, FXCM Holdings, Global Brokerage Inc (f/k/a FXCM Inc), Drew Niv and William Ahdout. Before the dismissal of the case, however, it was accepted as related to another case, that filed by Vantalie Nguyen, a former client of FXCM.

Doris Murrah maintained a forex trading account with FXCM between January 1, 2010 and December 31, 2016. The class action represented all clients of FXCM. Her complaint alleged that the Defendants made false and misleading statements to Plaintiff and the Class, engaged in or assisted fraudulent trade execution practices; violated the Commodity Exchange Act; breached their customer agreements with Plaintiff and the Class and whether Defendants; breached the implied covenant of good faith and fair dealing stemming from those agreements. The complaint also alleges that the Defendants were unjustly enriched at the expense of Plaintiff and the Class.

Murrah sought, inter alia, awarding money damages, including prejudgment interest, on each claim in an amount to be established at trial.

Let’s take a look at the Nguyen case now.

Vantalie Nguyen engaged in several forex transactions through FXCM’s “No Dealing Desk” platform during the Class Period (between March 10, 2010 and February 6, 2017). The “Class” includes all persons who, between March 10, 2010 and February 6, 2017 entered into a forex transaction through FXCM’s “NDD” platform. Excluded from the Class are the Defendants, the officers, directors, or employees of any Defendant, any entity in which any Defendant has a controlling interest, etc.

The class action accuses defendants of breaches of fiduciary duty and duty of best execution, the aiding and abetting thereof, breach of contract, breach of the implied covenant of good faith and fair dealing, gross negligence, unjust enrichment, and violations of the Commodities Exchange Act.

The Plaintiff and the Class allege they suffered an economic loss due to their orders going unfilled, underfilled, filled at a suboptimal price, and/or filled in a manner which adversely affects the order’s performance post-execution.

The plaintiff seeks a judgment awarding her and members of the Class damages against Defendants for their violations of the CEA, together with prejudgment interest at the maximum rate allowable by law. In addition, Ms Nguyen seeks the imposing of a constructive trust on all monies wrongfully obtained by FXCM. She also requests the Court to direct FXCM to identify victims of its conduct and pay them restitution and disgorgement of all monies acquired by FXCM by means of any act or practice declared by this Court to be wrongful.

The Plaintiff demands a trial by jury.

Global Brokerage has stated that it is familiar with the claims made in the Nguyen case and has voiced its intentions to defend itself against the accusations. Effex Capital and its CEO John Dittami are also aware of this case. In fact, they mention it explicitly in their complaint against the National Futures Association (NFA). In this complaint, Effex and Dittami allege that they suffered heavy business and reputation damages in excess of $10 million as a result of NFA’s “false and misleading claims”. Effex and Dittami say that Nguyen’s case stems from these “misleading claims”.

Dittami had asked for extension of time to answer to the Nguyen complaint and was granted such an extension earlier this month. Given the extension, he is set to respond by July 14, 2017.