Ex-clients of FXCM accuse broker of breaking laws of five States

Maria Nikolova

The amended complaint filed by former customers of FXCM who claim to have suffered damages as a result of the misleading claims concerning its “NDD” model features 14 counts, including 5 counts of breaching State laws.

As FinanceFeeds reported, in August this year, Judge Paul A. Crotty, of the New York Southern District Court, had ordered the consolidation of two legal actions brought by former clients of FXCM, who allege they suffered damages as a result of the undisclosed relationship of the broker and Effex Capital.

The consolidated case is captioned Nguyen v. FXCM Inc. et al (1:17-cv-02729) and targets Global Brokerage Inc (NASDAQ:GLBR), formerly known as FXCM Inc, Forex Capital Markets LLC, Global Brokerage Holdings, Drew Niv, William Ahdout, Effex Capital and John Dittami.

This is a class action against Defendants’ for 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., 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” (“NDD”) platform while FXCM publicly maintained that FXCM had no conflict of interest in the outcome of that trade.

On Saturday, September 30, 2017, the plaintiffs filed a new, amended complaint, with the 77-page document including 14 counts. Among these counts are accusations of breaking the laws of five States:

  • Violations of New York General Business Law § 349 by Plaintiff Cardi on Behalf of the New York Class

GBL Section 349 prohibits “deceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this state.” FXCM and Effex are alleged to have violated GBL Section 349 because each is said to have engaged in (a) consumer-oriented conduct that was (b) materially misleading and that (c) caused plaintiff to suffer injury as a result of the Defendants’ deceptive act or practice.

  • California Unfair Competition Law, Cal. Bus. & Prof. Code § 17200 et seq. by Plaintiffs Nguyen and Randhawa on Behalf of the California Class

The Unfair Competition Law, California Business & Professions Code §§ 17200, et seq. (the UCL), prohibits any “unlawful,” “unfair,” or “fraudulent” business act or practice and any false or misleading advertising. FXCM, Effex and their agents are alleged to have committed unlawful business practices by, inter alia, making the representations and omissions of material facts.

  • Violation of the Oregon Unlawful Trade Practices Act, O.R.S. § 646.605, et seq. by Plaintiff Govers On Behalf of the Oregon Class

The defendants are accused of violating Chapter 646 of the Oregon Revised Statutes which generally governs unlawful trade practices within the State of Oregon (the “OUTPA”). O.R.S. § 646.605, et seq.

  • Violation of Wisconsin Statutes Sections 895.446 and 943.20 by Plaintiff Plunger on Behalf of the Wisconsin Class

The defendants are accused of violating Wisconsin laws which prohibit “obtaining title to property of another person by intentionally deceiving the person with a false representation which is known to be false, made with intent to defraud, and which does defraud the person to whom it is made.” Wis. Stat. § 943.20.

  • Violation of South Carolina Unfair Trade Practices Act, S.C. Code Ann. §§ 39-5-10, et seq. by Plaintiff Tadrous on Behalf of the South Carolina Class

FXCM, Effex and their agents are alleged to have engaged in unfair competition or unfair, unconscionable, or deceptive acts or practices in violation of South Carolina Unfair Trade Practices Act, S.C. Code Ann. §§ 39-5-10, et seq.

The Plaintiffs seek, inter alia, award of damages against Defendants for their violations of the CEA, together with prejudgment interest at the maximum rate allowable by law; as well as awarding plaintiffs damages against Defendants for their violations of common law and state consumer statutes.

The Plaintiffs also seek that the Court imposes a constructive trust on all monies wrongfully obtained by Defendants; and that the Court directs Defendants to identify the victims of their conduct and pay them restitution and disgorgement of all monies acquired by Defendants by means of any act or practice declared by this Court to be wrongful.

Read this next

Retail FX

Investors from Cyprus and Dubai acquire ‘significant stake’ in M4Markets

Seychelles-regulated brokerage firm M4Markets firm has picked up some investment from Cyprus and Dubai based investors in a new funding round that it will be using to grow its business.

Executive Moves

UAE broker Amana elevates Amr Masry to sales director

Amr Masry has been promoted to a new senior role at Amana Capital, becoming the group’s newest Sales Director, following a successful tenure with the UAE-based FX and CFDs broker.

Executive Moves

TopFX promotes Omar Al-Janabi to head of sales and business development

Prime brokerage firm TopFX has strengthened its Middle East operations with the promotion of Omar Al-Janabi, who is taking on an expanded role as global head of sales and business development.

Retail FX

Plus500 says 2022 revenue to be ‘significantly’ ahead of analysts’ estimates

Israeli-based, but London-stock market listed Plus500 said it expects annual revenue and earnings to be ahead of analysts’ estimates even as trading levels normalised from record volumes in the first quarter.

Digital Assets

Crypto derivatives giant BitMEX launches spot market

Crypto exchange BitMEX is looking to branch out of its singular focus on crypto derivatives with a suite of new product offerings. Although derivatives are to remain at the heart of BitMEX’s business, the popular platform will add spot crypto trading as it aims to aggressively grow their user base.

Uncategorized

PrimeXM reports mixed trading volumes for April

PrimeXM has reported weaker trading volumes for April 2022, in line with other institutional and retail platforms that saw the activity of their clients dropped compared to a month earlier.

Digital Assets

DLT Finance approved by BaFin to support brokerage and custody of digital assets

DLT Finance is already partnered with big names within the digital asset space, including Kraken, Bitstamp, B2C2, and Bittrex.

Institutional FX

LUKB taps vestr to launch actively managed products, AMCs

The partnership with vestr goes to show the growing importance of digitising the active investment management space.

Digital Assets

Jewel taps Tokeny to launch stablecoin-as-a-service solution on Polygon

Jewel aims to offer a stablecoin-as-a-service solution to other digital asset and financial institutions B2B, allowing those businesses to provide cheaper, easier and near real time payments with stablecoins issued and redeemable directly at the bank level at Jewel.

<