Honorable Andrea R. Wood has given the National Futures Association several weeks to respond to the request for a preliminary injunction filed by Effex Capital, the company implicated in FXCM US exit.
There have been swift legal developments around Global Brokerage Inc (NASDAQ:GLBR), formerly known as FXCM Inc, these days. The latest update concerns the legal case brought by Effex Capital and its CEO John Dittami against the United States National Futures Association (NFA).
On Tuesday, Honorable Andrea R. Wood at the Illinois Northern District Court reviewed a motion by Effex Capital and its CEO for a preliminary injunction against NFA. In particular, the plaintiffs request that the court directs NFA to:
- remove the NFA Complaint, Decision, Narrative and Press Release from NFA’s website or, in the alternative, provide Plaintiffs with a name clearing hearing;
- issue a release stating that no adjudicatory findings were made concerning Effex or Dittami; and for such other further and different relief as the Court deems just and proper.
Putting it bluntly, Effex wants the materials involving its name with regards to the settlements of US regulators with FXCM from February this year to be taken down or revised in a manner that clears the name of Effex and its principal.
On Tuesday, the Court set the following briefing schedule on Effex’s motion for preliminary injunction:
- Defendants (NFA et al) shall respond by 7/7/2017;
- Plaintiffs (Effex Capital and John Dittami) shall reply by 7/17/2017.
- Defendants’ motion to dismiss shall be filed by 7/7/2017.
- Oral argument hearing is set for 7/24/2017.
Effex Capital alleges 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 halt or to decline to conduct business with Effex and Dittami. Also, firms have refused to issue positive reviews of Effex or Dittami. Commercial banks have terminated their relationships with Effex and Dittami.
On top of that, in relation to the NFA Complaint, a class action was filed in the New York Southern District Court against Effex and Dittami by Vantalie Nguyen. This case rests in part on the claims made in the NFA complaint against FXCM.
The Plaintiffs claim to have been damaged in an amount in excess of $10 million, with the precise amount to be determined at trial. Plaintiffs also seek punitive damages in an amount sufficient to deter similar actions in the future.