NY Court orders Stay on FXCM case, lawyers request to vacate conference
Judge Ronnie Abrams signs an order for Stay of litigation and related matters for case #1:17-cv-02035, Raul vs Sakhai et al.
The past several days have brought some news on the legal front for FXCM Inc, which is now known as Global Brokerage Inc (NASDAQ:GLBR), with the focus of these developments as one might expect, being the shareholder lawsuits filed against the brokerage following the events from early February this year.
As FinanceFeeds has already reported, there are several cases of similar nature filed against what was once a leading US Forex brokerage at the New York Southern District Court. In April this year, it became clear that five of these cases may be combined to create what is seen as a “mega lawsuit” against FXCM and its (former) principals.
A conference for consolidating the five cases – Khoury v. FXCM Inc. (No. 17-cv-916), Zhao v. FXCM Inc. (No. 17-cv-955), Blinn v. FXCM Inc. (No. 17-cv-1028), Raul v. Sakhai (No. 17-cv-2035), and 683 Capital Partners, LP v. Global Brokerage, Inc. (No. 17-cv-2506), had been scheduled for May 5, 2017. And here we have our first update: there has been a request from some of the plaintiffs to vacate the conference. Putting it in simple terms, to vacate a conference means to cancel it or suspend it.
The precise reasons for the motion are not clear but what we know from the information page for the Khoury v. FXCM Inc. (No. 17-cv-916) case is that Phillip Kim, from The Rosen Law Firm, filed a letter addressed to Judge Ronnie Abrams dated May 1, 2017. The letter concerns a request to vacate the May 5, 2017 status conference. That request was filed by 683 CAPITAL PARTNERS, LP, and Shipco Transport, Inc. (represented by Phillip Kim).
Apparently, there is a reason for such a request but it has not been made public (at least not at this point). Sources in the legal industry say that a usual reason for vacating a conference is that such a conference is “simply not needed”. Should this truism apply to this particular legal motion is a matter of speculation.
Another legal development concerning FXCM comes from the Raul v. Sakhai et al case (# 1:17-cv-02035). You may remember this case for having a whooping number of defendants – 13, including Global Brokerage Inc and FXCM COO David Sakhai. The plaintiff is represented by Joshua M. Lifshitz, Lifshitz & Miller.
On April 27, 2017, Judge Ronnie Abrams signed an order for the Stay of litigation. The court decision was in response to a request by the parties that the court Stay this litigation and all proceedings and deadlines. The Stay is set to remain in place pending the earlier of:
- the close of discovery in the Related Securities Class Actions,
- the deadline for appealing a dismissal of the Related Securities Class Actions with prejudice.
Apparently, this Stay has to do with the way related cases against FXCM are progressing in court and the potential launch of other similar cases.
The latest developments on the legal front happen as Global Brokerage Inc submitted its amended annual report for 2016, with the amendments concerning director compensation and the management structure of the company. The amended report shows that Drew Niv, who is a defendant in all of the cases just mentioned, is still an Interim Chief Executive Officer at Global Brokerage Inc and that he is poised to receive severance cash payments of $3.2 million in case of termination of his employment contract without cause or resignation for good reason.