FXCM’s outstanding debt to Leucadia at $67 million at the end of Q3 2017

Maria Nikolova

The repayment of the loan extended by Leucadia to FXCM continues, with Leucadia having received $349 million in cash from principal, interest and fees through September 30, 2017.

Many of you must be aware that Leucadia National Corp. (NYSE:LUK) is holding an Investor Meeting later today. The company has filed some documents related to this meeting with the United States Securities and Exchange Commission (SEC), with our focus on any information about FXCM that its Investor Meeting presentation may include.

In the presentation, Leucadia says that through September 30, 2017, it has received total cash of $349 million from principal, interest and fees (including $61 million in the third quarter), with $67 million of the original $300 million loan still outstanding which is accruing a 20.5% annual interest.

The book value of Leucadia’s interest in FXCM was $303 million at June 30, 2017.

The strategic priorities for FXCM include efforts to continue to repay the loan provided by Leucadia, after having sold its stake in FastMatch earlier this year to Euronext. Lucid Markets continues to be marketed for sale. Interestingly, there is no mention in this respect of V3 Markets.

Meanwhile, the terms of the Leucadia’s loan extended to FXCM after the January 15, 2015 events have attracted the attention of the Delaware Court of Chancery. In a Memorandum Opinion issued on September 29, 2017, Vice Chancellor Sam Glasscock III said entire fairness review is appropriate with regard to the Leucadia deal.

The Court is examining a case brought by a stockholder of FXCM Inc, which is now known as Global Brokerage Inc (NASDAQ:GLBR). The questions before the Court include whether the Leucadia loan represented a waste of assets and whether the terms of the transaction were unfair to the broker.

The Court said that the plaintiff played down the urgency with which the FXCM Board had to act when having to decide on the potential deal, but the Court supported a review of the Leucadia transaction.

“I have found it reasonably conceivable that entire fairness review is invoked here. Under that standard of review, it is appropriate that I examine the transaction with a full record”, said Vice Chancellor Glasscock.

The “entire fairness standard” is triggered in cases where a majority of the directors approving the transaction are interested or where a majority stockholder stands on both sides of the transaction. When the entire fairness standard is applied, the corporate board has the burden to demonstrate that the transaction is inherently fair to the stockholders by demonstrating both fair dealing and fair price.

Read this next

Metaverse Gaming NFT

Despite crypto winter, Fastex grabs $23.2 million in Fasttoken token sale

Fasttoken, part of the Fastex web3 ecosystem, has secured $23.2 million in financing through the private and public token sales of its native cryptocurrency Fasttoken (FTN).

Digital Assets

Iran to repay Russian debts in gold-backed stablecoins

A high-ranking member of the Russian parliament confirmed reports that his country was in talks with Iran to create a stablecoin for foreign trade settlements, to replace the dollar, ruble and Iranian rial.

Digital Assets

SEC denies Cathie Wood’s bitcoin ETF for second time

The approval of a regulated crypto derivative is still looking far less likely, as the US regulators have once again denied Cathie Wood’s application for a long-awaited spot bitcoin exchange-traded fund (ETF).

Executive Moves

Pavel Spirin promoted to Scope Markets CEO following Rostro acquisition

Belize-based FX and CFDs brokerage Scope Markets has promoted Pavel Spirin to take on an expanded role as the company’s chief executive officer. He replaces the outgoing CEO Jacob Plattner, who has also been a major shareholder since he resigned his position as managing director at GKFX.

Retail FX

Public.com goes all-in on alternative investing, launches Rare Sneaker Portfolio

“The concept of curated Portfolios means that our members will be able to invest in categories like art, trading cards, royalties, and real estate without needing to become subject matter experts on individual assets.”

Industry News

State Street taps AWS and Microsoft for cloud and infrastructure solutions

“By standardizing and simplifying our technology operating model, we will be able to more quickly deploy client environments and launch new products and services, while continuing to enhance the resiliency of our technology environment and our business operations.”

Institutional FX

Bitpanda launches Investment-as-a-Service business for banks, fintechs, online platforms

“Financial institutions today have to ask themselves how they aim to cater the increasing demand for modern investing solutions. Building these Individually, means a high startup cost, and products that are often outdated before they are even launched.”

Institutional FX

Options expands market data feeds after partnership with Tools for Brokers

“Our integration with ACTIV Financial marked the beginning of a new era in market data availability and infrastructure. Our teams have come together to provide unparalleled, fully managed market data services alongside Options’ global connectivity and infrastructure.”

Industry News

Recruitment in financial services sector buoyant despite planned mass layoffs

“It remains to be seen what impact this will have on hiring levels within the financial services arena this quarter”, said APSCo, regarding the expected mass layoffs within the financial services sector in England & Wales.