The number of cases against FXCM and Effex Capital continues to grow, with the legal action launched by Arthur Cardi and other former customers of the broker accepted as related to the case filed by Vantalie Nguyen.
While Effex Capital and its CEO John Dittami are busy contesting claims made in the National Futures Association complaint against FXCM and allege damages including ones suffered as a result of the case filed by Vantalie Nguyen, the volume of legal actions against the broker and Effex is growing. Moreover, a new case filed against FXCM and Effex at the New York Southern District Court has just been accepted as related to the one brought by Nguyen.
According to today’s court filings, the case captioned Cardi et al v. FXCM, Inc. et al (1:17-cv-04699) was accepted as related to case# 1:17-cv-02729, that is, the Nguyen case. The attorneys for the plaintiffs had earlier submitted a statement saying that both actions are securities/commodities/exchange actions with a similar fact pattern and the same defendants. The latest case has seven defendants, including Global Brokerage Inc (NASDAQ:GLBR), Forex Capital Markets LLC, Global Brokerage Holdings, Drew Niv, William Ahdout, Effex Capital and John Dittami.
Is the court decision about the case relatedness important? Well, it may lead to consolidation of cases. Another case, that filed by Doris Murrah, has also been accepted as related to the Nguyen case. Usually, as the number of related cases rise, the assigned judge may review a motion to consolidate them.
We have already seen an example of consolidation of cases against FXCM. In May, four related cases against the broker were consolidated in one “mega lawsuit”. These Securities Class Actions were consolidated for purposes including, but not limited to, discovery, pretrial proceedings and trial proceedings.
Last week, the plaintiffs in this “mega lawsuit” filed an amended complaint against the broker and 18 other defendants, including directors and senior employees at the brokerage accounting department. The plaintiffs had purchased FXCM securities and claim to have been damaged when the February announcements were made by US regulators resulting in the collapse in prices of these securities. The plaintiffs are seeking an award of compensatory damages in an amount to be proven at trial.
The Cardi and the Nguyen cases are brought by former customers of FXCM who claim to have suffered damages as a result of the misleading claims concerning its “No dealing desk” model.