FXCM Inc not to oppose addition of E-Global to list of plaintiffs in “mega lawsuit”

The parties in the so-called “mega lawsuit” brought by investors in FXCM Inc, now known as Global Brokerage Inc, have filed a joint status letter updating the New York Southern District Court on the progress of discovery to date, as well as any settlement efforts.

The document makes it clear that the defendants will not oppose the plaintiffs’ motion to add E-Global to the list of plaintiffs. The plaintiffs will amend their class certification motion by no later than April 10, 2020 to replace named plaintiff Sergey Regukh with E-Global as a proposed class representative, as the plaintiffs contend that E-Global is the real party in interest with respect to Mr. Regukh’s claims.

The defendants will also seek to depose E-Global under Rule 30(b)(6), and the parties are currently discussing scheduling and the scope of the deposition. Mr. Regukh is the expected corporate representative for E-Global and he does not anticipate any problem finding availability for a videoconference deposition at a mutually agreeable date and time in April.

The case relates to events from February 2017. The readers of FinanceFeeds may recall that back then the brokerage was banned from the US retail FX market following regulatory action.

In response to the CFTC and NFA orders, the price of FXCM’s stock and the FXCM Notes dropped sharply, damaging investors.

Let’s recall that 683 Capital, Shipco, and Regukh filed their motion for class certification on January 6, 2020. The plaintiffs are pursuing claims on behalf of a class of FXCM investors under §§ 10(b) and 20(a) of the Securities Exchange Act of 1934 (“Exchange Act”) against FXCM; Dror Niv, FXCM’s co-founder, CEO, and Chairman of the Board; and William Ahdout, FXCM’s co-founder, Chief Dealer, Managing Director, and director.

The proposed Class is defined as:

“All persons and/or entities that purchased or otherwise acquired publicly traded Global Brokerage, Inc., f/k/a FXCM Inc. (“FXCM”) securities, including FXCM 2.25% Convertible Senior Notes due 2018 and Class A common stock, during the period March 15, 2012 through February 6, 2017, both dates inclusive”.

According to the plaintiffs, E-Global is no differently situated than the other plaintiffs with respect to the claims in the complaint. E-Global is a class member of the putative class because it purchased publicly traded FXCM securities during the putative Class Period – March 15, 2012 to February 6, 2017, inclusive, the plaintiffs explain.