FXCM, Drew Niv, William Ahdout get more time to respond to complaint in “mega lawsuit”
The Court has granted the request to extend the defendants’ time to respond to the plaintiffs’ Second Amended Complaint up to and including May 13, 2019.
Global Brokerage, Inc. formerly known as FXCM Inc., Dror Niv, and William Ahdout have secured extra time to respond to the complaint in the so-called “mega lawsuit” against them. On Wednesday, April 10, 2019, the New York Southern District Court granted a request by the parties to extend the defendants’ time to respond to the plaintiffs’ Second Amended Complaint up to and including May 13, 2019.
The status conference scheduled to take place on May 9, 2019 has therefore been adjourned pending this submission. The Court is set to schedule a status conference shortly thereafter.
The granting of extra time follows the Court’s ruling from March 2019 which nixed the motion to dismiss filed by FXCM, Dror Niv, and William Ahdout. The Court, however, granted the motion to dismiss by Robert Lande.
The lead plaintiffs in this case – 683 Capital Partners, LP and Shipco Transport Inc., and named plaintiffs Sergey Regukh and Brian Armstrong, have brought this action, alleging that, from March 15, 2012 until February 6,2017, the defendants committed securities fraud in violation of Sections IO(b) and 20(a) of the Securities Exchange Act of 1934 and Rule l0(b)-5. Specifically, the plaintiffs allege that the defendants were responsible for false or misleading statements with respect to the company’s purported agency-trading model and FXCM’s relationship with another company, Effex.
On March 28, 2019, the Court concluded that the second amended complaint adequately alleges that FXCM, Niv and Ahdout have committed securities fraud with respect to statements or omissions concerning FXCM’s supposed agency-trading model, the Company’s purported “order flow” payments with Effex, and Generally Accepted Accounting Principles (“GAAP”).
The Court also determined that the second amended complaint plausibly alleges that FXCM misled investors in its public filings with respect to its purported agency-trading model, but only from the beginning of the Class Period until the end of its order flow arrangement with Effex in August 2014.
Further, the Court has found that the plaintiffs plausibly allege that Niv and Ahdout “knew facts or had access to information suggesting” that FXCM’s portrayal of its agency-trading model and financial arrangements with Effex were “not accurate.”
Finally, the Court determined that the plaintiffs have adequately alleged that FXCM’s drop in stock price was caused by the regulatory investigations’ disclosure of the defendants’ purported fraud, and that the plaintiffs properly plead loss causation.