Judge Paul A. Crotty of the New York Southern District Court has granted Effex Capital and its CEO time extension until September 1, 2017, to answer to complaint by disgruntled FXCM clients.
One of the cases against Global Brokerage Inc (NASDAQ:GLBR) that is gradually proceeding in the New York Southern District Court is that brought by Vantalie Nguyen on behalf of former FXCM clients who traded on the “NDD” platform offered by the broker and claim to have suffered damages as a result of the broker undisclosed interest in Effex Capital.
The Nguyen v. FXCM Inc. et al case names as defendants FXCM Inc (now known as Global Brokerage), FXCM Holdings, Dror Niv, William Ahdout, as well as Effex and its CEO John Dittami.
As FinanceFeeds has reported earlier, Mr Dittami and Effex Capital have requested another time extension to respond to the complaint by the plaintiffs. As per the latest court updates, the requested time extension was granted – as a result, Effex Capital and its CEO have time until September 1, 2017 to file their answer.
One of the possible reasons for the extension request is that the lawyers for Effex and its CEO would like to see the developments around another case – Effex Capital, LLC et al v. National Futures Association et al. The latter alleges that NFA revealed Effex’s trade secrets and caused harm to the company by posting the news release and complaint concerning FXCM and its alleged relations with Effex on February 6, 2017. Effex is now seeking for NFA to remove and/or amend the materials involving Effex from its website.
On Monday, NFA filed a Motion to Dismiss the complaint by Effex Capital and John Dittami. The Association insists that “as a self-regulatory organization, it has absolute immunity because all Effex’s claims arise out of NFA’s execution of its regulatory responsibilities”. It also says that Effex improperly and prematurely brought the suit against it without first exhausting available administrative remedies.
Claims made in the NFA complaint against FXCM served as an essential part of the evidentiary support in a number of cases brought against the broker. The Nguyen case is also based on this complaint to a great extent. NFA alleges that FXCM has had an undisclosed stake in liquidity provider Effex Capital and in this way the broker misled its customers over a period of several years.
Interestingly, while Effex and its CEO ask for time extensions, there is still no news regarding any answer to the complaint from Global Brokerage and its principals. In its report for the first quarter of 2017, the company said it was aware of the case brought by Nguyen and voiced its intentions to defend itself. Since then, there has been no official comment from Global Brokerage or any other FXCM entity about legal matters.