“Mega lawsuit” targeting FXCM Inc may see E-Global added to list of plaintiffs

Maria Nikolova

The lawsuit is brought by investors in FXCM’s securities who were harmed by the share price drop in February 2017 when the brokerage was banned from the US retail Forex market.

The so-called “mega lawsuit” brought by investors in FXCM Inc, now known as Global Brokerage Inc, continues at the New York Southern District Court. 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.

The “mega lawsuit” may see more plaintiffs added, as indicated by a motion submitted on March 16, 2020. Lead Plaintiffs 683 Capital Partners, LP and Shipco Transport Inc., named plaintiffs Sergey Regukh and Brian Armstrong, and movant E-Global Trade and Finance Group Inc. seek to add E-Global as a named plaintiff in the action.

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. The document filed by the plaintiffs in the “mega lawsuit” does not quantify the amount of losses E-Global allegedly incurred as a result of FXCM’s share price drop.

Class discovery, including the depositions of the proposed class representatives, is still ongoing. Counsel for the parties have conferred and agreed in principal to further extend the class certification deadlines in light of recent developments with the COVID-19 pandemic.

Read this next

Digital Assets

Silvergate dismisses speculation of trouble, says BlockFi exposure is minimal

Crypto-friendly bank Silvergate Capital claimed on a Tuesday blog post that it had minimal exposure to crypto lender BlockFi, which filed for chapter 11 bankruptcy protection this week.

Retail FX

Fidelity launches crypto trading for retail investors

Fidelity Investments, one of the largest brokerages in the world, has officially rolled out a commission-free crypto trading product for retail investors, starting with zero-fee trading for Bitcoin and Ethereum.

Digital Assets

ECB head calls for tougher crypto regulation after FTX collapse

President of the European Central Bank, Christine Lagarde, has called on lawmakers to start working on fresh crypto regulations to protect the financial system after the collapse of the FTX exchange.

Retail FX

CySEC updates rules for regulated brokers’ cross border activity

As CySEC’s attitude of adopting more stringent licensing guidelines and operating regulations becomes ever clearer, certain aspects of the rules and operations start to come into sharper focus.

Market News

Outlook for Gold: Can the Precious Metal Regain Power?

Gold set an all-time high at $2070 on March 08, 2022, when the price skyrocketed amid investors’ worries about the military conflict in Eastern Europe.

Crypto Insider

2022 Islamic Finance recap: as the space continues to evolve, blockchain stands to play a big part

Despite the global economy being ravaged by turmoil induced by the Covid-19 pandemic over the last couple of years, the Islamic finance industry has emerged relatively unscathed

Crypto Insider

Decentralized Exchanges and Pooled Trading Platform Applications

Decentralized exchanges are one-way blockchain companies take back the power of value creation.

Crypto Insider

How to maximize the safety of your digital tokens?

Digitalization is the future of the investment world. These are the most preferred and growing investments in the world.

Institutional FX, Interviews

FIA EXPO 2022: Interview with Trading Technologies

The derivatives trading industry has gathered in Chicago to attend the FIA EXPO 2022 on 14-15 November. 

<