FXCM ramps up workforce reduction plans, updates on litigation
The restructuring plan envisages 170 employees losing their jobs compared to initially reported 150 employees.
One of the gravest consequences of FXCM exiting the US retail Forex market is that many people lost their jobs. According to the initial reports issued by the company back in February, the planned restructuring of its operations involved 150 layoffs, or 18% of its global workforce. However, the 10-Q report just filed by Global Brokerage Inc (NASDAQ:GLBR) with the US Securities and Exchange Commission (SEC) has displayed somewhat different numbers, as it appears that FXCM is ramping up its workforce reductions plans.
The company said that in the first quarter of 2017, it implemented a restructuring plan as a result of its withdrawal from business in the US pursuant to the February regulatory settlements. The restructuring plan provides for a workforce reduction of approximately 170 employees, which represents 22% of FXCM’s global workforce. The revision is upwards.
The company explains that the majority of the affected employees completed service through the required notice period in April 2017.
In the first quarter of 2017, the company incurred total restructuring charges of $8.4 million, including severance costs for terminated employment contracts and continuing contract costs without economic benefit to the company.
Global Brokerage also reiterated its commitment to defend itself against lawsuits filed against it in response to the announcement on February 6, 2017.
As FinanceFeeds has reported, a number of putative securities class action lawsuits have been filed against Global Brokerage, Inc., Drew Niv, and Robert Lande in the U.S. District Court for the Southern District of New York. Four of these lawsuits have been combined.
In addition, Global Brokerage today provided some details about another case (# 1:17-cv-02729), filed by a customer of US on April 14, 2017. This is a class action on behalf of customers who traded on the “No Dealing Desk” platform during the 2010-2016 period. The plaintiffs allege that these customers were harmed as a result of FXCM’s relationship and use of Effex Capital, LLC as a liquidity provider. The class action alleges (inter alia) breach of contract and breach of fiduciary duty by US and other related claims against Global Brokerage (FXCM), FXCM Holdings, Dror Niv, William Ahdout, and Effex and its principal.
FXCM insists it will defend itself against these accusations too.