NY Court approves FXCM “mega lawsuit” case management plan

Maria Nikolova

The case, stemming from the events from February 2017 which led to FXCM’s exit from the US retail Forex market, is to be tried to a jury.

Judge Ronnie Abrams of the New York Southern District Court has signed the schedule and case management plan proposed by the parties in the so-called “mega lawsuit” targeting Global Brokerage, Inc. formerly known as FXCM Inc., Dror Niv, and William Ahdout.

The case, brought by FXCM Inc stockholders, relates to the events from February 2017 which saw the brokerage leave the US retail FX market. The lead plaintiffs in this case – 683 Capital Partners, LP and Shipco Transport Inc., and named plaintiffs Sergey Regukh and Brian Armstrong, allege that from March 15, 2012 until February 6, 2017, the defendants committed securities fraud in violation of Sections IO(b) and 20(a) of the Securities Exchange Act of 1934 and Rule l0(b)-5. Specifically, the plaintiffs allege that the defendants were responsible for false or misleading statements with respect to the company’s purported agency-trading model and FXCM’s relationship with another company, Effex.

The order signed on Tuesday, June 4, 2019, stipulates that all parties do not consent to conducting all further proceedings before a United States Magistrate Judge, including motions and trial. The parties are free to withhold consent without adverse substantive consequences.

This case is to be tried to a jury. The parties have conferred and their present best estimate of the length of trial is 5-10 days.

Amended Pleadings are due by April 3, 2020. Discovery is due by November 4, 2020. Post Discovery Conference is set for November 8, 2020 at 11:00 AM before Judge Ronnie Abrams.

On March 28, 2019, the Court concluded that the second amended complaint adequately alleges that FXCM, Niv and Ahdout have committed securities fraud with respect to statements or omissions concerning FXCM’s supposed agency-trading model, the Company’s purported “order flow” payments with Effex, and Generally Accepted Accounting Principles (GAAP).

The defendants filed their answer with the New York Southern District Court on May 13, 2019. The document enlisted 46 affirmative defenses. For instance, the defendants claim that the plaintiffs’ claims are barred, in whole or in part, because the alleged misrepresentations are non-actionable statements that contain expressions of opinion that the plaintiffs have not alleged, and cannot prove, were not truly held.

Finally, the defendants argue that they at all times acted in good faith and in reasonable reliance upon the representations, reports, expert opinions and advice of others. They insist they were entitled to, and did, rely upon representations, reports, expert opinions and advice of others in affixing their signatures to, and authorizing public filings.

The lawsuit continues at the New York Southern District Court. 

Read this next

Institutional FX

Eurex reports mixed volumes for November 2022

Deutsche Börse’s derivatives-focused exchange, Eurex today said its total traded derivatives contracts grew by 10 percent in November, from 68.6 million to 75.3 million compared to the same month last year.

Digital Assets

AAX’s Nigerian customers storm local office amid withdrawal halt

According to the Nigerian media, angry consumers of the troubled crypto exchange AAX had stormed its local office hoping they can get their money back after the firm halted operations earlier in November.

Digital Assets

As SPAC bubble bursts, Circle terminates its $9 billion merger with Concord

USDC stablecoin issuer, Circle has terminated its planned $9 billion SPAC merger with publicly traded blank-check company Concord Acquisition Corp.

Institutional FX

Integral reports lowest FX volume in two years

Foreign exchange trading volumes dropped in November across Integral’s trading platforms as currency markets saw a relatively quiet period after consecutive months of strong trading activity.

Technology

CDEX: Avelacom announces connectivity to Cboe Europe Derivatives

“We anticipate that many of our customers from Asia will be particularly interested in getting exposure to pan-European products via just one venue, which CEDX offers.”

Retail FX

BUX acquires Spanish Ninety Nine’s retail brokerage unit

“Thanks to this acquisition, Ninety Nine users will have access to a wide range of services provided by BUX, such as investing in Spanish, European and US stocks, ETFs, cryptocurrencies, fractional investing and the BUX Savings Plan.”

Digital Assets

SEBA and HashKey partner to expand crypto in Hong Kong and Switzerland

SEBA Bank AG has announced a new strategic partnership with HashKey Digital Asset Group as part of both firm’s expansion efforts in Hong Kong SAR. 

Executive Moves

Broadridge appoints Martin Koopman as Chief Product Officer

“Martin has a proven record of driving product innovation both at Broadridge and at previous companies. His vision and proven ability to execute will be invaluable as we become the foremost SaaS provider to the financial services industry.”

Digital Assets

DAM rolls out Moonwalkers v1 testnet ahead of support for yield-generating collateral

“We want to champion innovation by making it easier to securely direct stablecoin liquidity away from Ethereum towards newer networks without the constant vulnerabilities posed by bridges. d20 will help accelerate the adoption flywheel of emerging networks, and this is our first step towards making our omnichain promise a reality.”

<