NY Court stays “mega lawsuit” against FXCM Inc pending mediation outcome
No later than October 7, 2020, the parties in the case will have to submit a joint letter, informing the Court as to whether the mediation was successful.
Magistrate Judge Barbara C. Moses of the New York Southern District Court has granted a request by the parties in the “mega lawsuit” targeting FXCM Inc, now known as Global Brokerage Inc, to put the proceedings on hold.
Discovery is stayed pending further order of the Court. However, the evidentiary hearing scheduled for October 15, 2020 will remain on the Court’s calendar. No later than October 7, 2020, the parties will have to submit a joint letter, informing the Court as to whether the mediation was successful.
As FinanceFeeds has reported, the parties in this case sought the stay while they pursue mediation.
The “mega lawsuit” has been brought by FXCM investors. The case relates to events from February 2017. 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.
In April this year, the Court approved the plaintiffs’ motion to add E-Global Trade and Finance Group Inc. (E-Global) as a party plaintiff. In granting the motion, the Judge noted that all parties consented to the addition of E-Global to the plaintiffs’ list. E-Global replaces named plaintiff Sergey Regukh as a class representative, with the plaintiffs contending that E-Global is the real party in interest with respect to Mr. Regukh’s claims.
683 Capital, Shipco, and Sergey 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”.
