Effex Capital, John Dittami seek more time to reply in lawsuit brought by ex-FXCM US clients
The entity implicated in FXCM’s US exit continues to insist that it needs more time to explore a potential resolution of the matter.
Effex Capital, the company that was implicated in FXCM’s exit from the United States retail Forex market, is seeking another extension in order to respond to accusations against it and its CEO John Dittami in a lawsuit brought by former FXCM clients.
In a Letter to Judge Paul A. Crotty of the New York Southern District Court, filed on Wednesday, Effex and Dittami ask that the deadlines for filing their Motion to Dismiss in the case are pushed by three weeks. The extension is set to provide the parties with more time to explore possible resolution of the issues at hand.
Effex and Dittami already won a reprieve in January when Judge Paul A. Crotty agreed to give them three more weeks to file their motion to dismiss. Under the adjusted schedule, the date to file this motion was set for March 6, 2018. Back then, Effex and Dittami gave the same explanation for their request – that an extension would allow the parties in the case to explore a potential resolution of the matter.
The case, captioned Nguyen v. FXCM Inc. et al (1:17-cv-02729), is a class action brought on behalf of all customers of FXCM who, between March 1, 2010 and February 6, 2017, placed trade orders through FXCM’s “No Dealing Desk” platform while FXCM publicly maintained that FXCM had no conflict of interest in the outcome of that trade. The case also targets FXCM Inc, now known as Global Brokerage Inc (OTCMKTS:GLBR), Forex Capital Markets LLC, Global Brokerage Holdings, Drew Niv and William Ahdout.
The action accuses the defendants of, inter alia, 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, 7 U.S.C. § 1 et seq.
In their previous reply to the plaintiffs’ accusations, Effex and Dittami have argued they are not liable for control person liability under the Commodities Exchange Act. Also, Effex and its CEO claim that they are not liable for deceptive acts or practices under Section 349 of the New York General Business Law because the plaintiffs have failed to “make a threshold showing that the challenged act or practice was consumer oriented”. In addition, the plaintiffs are said to have failed to allege any deceptive acts by Effex or Dittami.
Effex and Dittami say that the former FXCM customers have failed to plead a direct relationship between themselves and Effex (or Dittami) which is required by New Jersey law. Regarding the New York Law, the plaintiffs are said to have failed to allege that they bestowed a benefit on Effex and/or Dittami for which they expected to be paid.
Whereas this case keeps getting protracted as a result of factors like Global Brokerage’s filing for bankruptcy which has led to an automatic stay of the proceedings against the broker, another lawsuit against Global Brokerage is set to finally see some progress today. An oral argument in the “mega lawsuit” – a class action on behalf of investors in the public securities of FXCM Inc, is scheduled for March 1, 2018.
