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