Legal cases against FXCM continue to pile up in NY court

Maria Nikolova

The latest case against the broker was filed yesterday on behalf of FXCM customers from five US states who claim to have suffered losses due to the broker NDD claims.

The volume of legal actions against Global Brokerage Inc (NASDAQ:GLBR), formerly known as FXCM Inc, keeps growing, with the New York Southern District Court being the usual institution to receive the complaints against the broker.

On Wednesday, June 21, 2017, another civil case was filed against the company. The case, captioned Cardi et al v. FXCM, Inc. et al (1:17-cv-04699), has seven defendants, including Global Brokerage Inc, Forex Capital Markets LLC, Global Brokerage Holdings, Drew Niv, William Ahdout, Effex Capital and John Dittami.

The class includes all persons who between March 10, 2010 and February 6, 2017 entered into a forex transaction through FXCM’s “No Dealing Desk” platform. There are also subclasses including all plaintiffs in New York, California, Wisconsin, Oregon, and South Carolina.

The class action alleges that the defendants violated the Commodities Exchange Act and the consumer laws of New York, California, Wisconsin, Oregon and South Carolina. According to the complaint, filed with the court, the defendants got enriched on behalf of all customers of FXCM who placed trade orders through FXCM’s “No Dealing Desk” platform while the broker publicly asserted that it had no conflict of interest in the outcome of trades made on the NDD Platform.

The plaintiffs claim that they have been harmed because “revenues flowed improperly to FXCM, Inc., FXCM Holdings, Forex Capital and Effex Capital, LLC” and insist they are entitled to damages as a result of the unjust enrichment of the defendants. The plaintiffs also demand the imposition of a constructive trust on all monies wrongfully obtained by the defendants and that the court directs FXCM to identify victims of its conduct and pay them restitution and disgorgement.

The attorneys for the plaintiffs have filed a related case statement with the court. The statement says that the Cardi et al v. FXCM, Inc. et al (1:17-cv-04699) action is a securities/commodities/exchange action with a similar fact pattern and the same defendants as (1:17-cv-02729), that is, the case filed by Vantalie Nguyen against FXCM and Effex.

The Nguyen case is at an early stage. The Complaint was filed and served, and defendants requested and received an extension to respond until July 14, 2017.

The allegations made in the Cardi case and the Nguyen case are partially based on information in the National Futures Association (NFA) complaint against FXCM and its principals. The document, along with a press release was published on NFA’s website on February 6, 2017.

Effex Capital claims that the NFA complaint, which stated that Effex was controlled by FXCM, has caused a number of Effex’s existing and prospective counterparts, vendors and prospective vendors to stop or to decline to conduct business with Effex and Dittami. In addition, firms have refused to issue positive reviews of Effex or Dittami, whereas commercial banks have terminated their relationships with Effex and Dittami. Effex is now seeking a preliminary injunction against NFA that will force the body to remove the complaint and the press release from its website.

If this happens, the evidentiary support for several legal cases against FXCM, including the Nguyen case, will be undermined.

Read this next

Industry News

Exness Crowned as Best Global Multi-asset Broker at Forex Expo Dubai 2023

Cyprus-based Exness garners top honors at the Forex Expo Dubai, solidifying its esteemed position in the global financial arena.

Retail FX

CySEC cancels license of 101investing parent following €200,000 fine

The Cyprus Securities and Exchange Commission (CySEC) confirmed on Tuesday that it has wholly withdrawn the Cyprus Investment Firm (CIF) License of FX retail brokerage firm FXBFI Broker Financial Invest Ltd, trading as 101investing.

Retail FX

Scope Markets doubles down on Middle East: AED accounts ahead of GCC Equity CFDs

“To bolster our footprint in this thriving ecosystem, it was a strategic imperative to integrate AED accounts and introduce a slew of CFD equities reflecting the GCC landscape. This not only appeases the domestic audience but also beckons international investors aspiring to delve into these dynamic markets.”

Market News

Navigating the Complex World of Central Banks: Inflation, Rates, and Economic Growth

Inflation continues to loom large over both European households and businesses, leaving central banks in the region grappling with a prolonged battle to reach their target levels.

Institutional FX

QUODD partners with Blue Ocean for real-time after-hours market data

“Investors are increasingly global, and market data providers like QUODD are facilitating access to data that enables global traders to invest in US markets. Partnering with top-tier fintech providers like QUODD allows Blue Ocean to extend its reach to a new demographic of investors.”

Retail FX

Moomoo Canada launches pro-level tools, free Level 2 data, and affordable US stock trading

“Being a real social trading platform in Canada, we cultivate a unique ecosystem helping our users grow… The world is eager to hear the voice of Canadian individual investors, and we look forward to more contributions from Canadian investors in our moo community.”

Industry News

CFTC sues Patrick Wonsey for $3.4 million FX and binary options scam

Wonsey allegedly diverted these monies for personal use and orchestrated payouts to other pool participants, mirroring a classic Ponzi scheme.

Digital Assets

MoneyGram to launch non-custodial digital wallet

“In collaboration with SDF, MoneyGram has been working towards creating equitable access to the global financial system. With the introduction of this non-custodial digital wallet, we are further emphasizing our commitment to providing consumers with a bridge to the digital economy while upholding our brand’s integrity for speed, efficiency, and trust.”

Digital Assets

Binance exits Russia as part of crypto exchange’s compliance strategy

“As we look toward the future, we recognize that operating in Russia is not compatible with Binance’s compliance strategy. We remain confident in the long-term growth of the web3 industry around the world and will focus our energy on the 100+ other countries in which we operate.”