NY Judge asks whether “Black Swan” lawsuit against Drew Niv should be stayed

Maria Nikolova

After the “Black Swan” case against Global Brokerage had been stayed, Judge Kimba Wood asks whether the action should be stayed against Drew Niv too.

Less than a fortnight after Global Brokerage Inc (NASDAQ:GLBR), formerly known as FXCM Inc, filed for Chapter 11 bankruptcy, questions about the effects of this procedure on the lawsuits brought against the company and its senior executives are piling up.

The filing for Chapter 11 has led to the automatic stay of a number of actions against Global Brokerage, including the so-called “mega lawsuit” and the “Black Swan” case at hand.

But whereas the procedure of staying a case against a company that has filed for bankruptcy is pretty straightforward, the future of proceedings against individual defendants in these cases has yet to be made clear.

On Friday, December 15, 2017, Judge Ronnie Abrams signed an order concerning the individual defendants in the “mega lawsuit”: Dror Niv, William Ahdout, David Sakhai, Eduard Yusupov, Janelle G. Lester, Robert Lande, Omit Niv, Nicola Santoro, Jr., Margaret Deverell, David S. Sassoon, Kenneth Grossman, James Brown, Ryan Silverman, Arthur Gruen, Robin E. Davis, Eric LeGoff, and Bryan Reyhani. The plaintiffs and individual defendants in this case were directed to submit a joint letter, no later than December 29, 2017, indicating whether this case should proceed against the individual defendants, or whether the entire case should be stayed.

Now, another judge of the New York Southern District Court – Kimba M Wood, who is assigned to the case captioned International Union of Operating Engineers Local No. 478 Pension Fund v. FXCM Inc. et al (1:15-cv-03599), is asking whether the lawsuit should proceed against the individual defendants in the case – Drew Niv and Robert Lande.

On Thursday, December 21, 2017, Judge Kimba M Wood issued an Order informing the parties in the case that on or before January 12, 2018, they shall advise the Court whether this action should be stayed as to Niv or Lande, pending the resolution of FXCM, Inc.’s bankruptcy.

The case is a securities fraud class action brought on behalf of all purchasers of FXCM common stock between March 17, 2014 and January 20, 2015. During the Class Period, Plaintiff and the Class purchased FXCM securities at allegedly artificially inflated prices. When FXCM’s and Niv’s alleged misrepresentations were revealed and the information once concealed from the market was unravelled, the price of FXCM’s securities significantly declined, causing investors’ losses. The defendants’ conduct is said to have caused an economic loss to the Plaintiff and the Class.

Specifically, the defendants are alleged to have wrongly attributed FXCM’s losses to a once-in-a-lifetime “Black Swan event,” falsely stating that the failure of its banks to provide pricing and a lack of liquidity had caused its customers’ positions to be liquidated at dislocated prices. According to the plaintiffs, the FXCM “flash crash” narrative was a smokescreen.

Read this next

Inside View

Crypto Liquidity Providers: No Transaction, No Party!

One of the most integral parts of trading cryptocurrencies is ensuring seamless transactions; however, this is not always easy when you first start using cryptocurrency exchanges.

Digital Assets

Niftables launches white label NFT platform for content creators and brands

Niftables is the go-to platform for brands and creators looking to realize their NFT vision — whether they’re an individual or the biggest entertainment company in the world.

Retail FX

ACY Securities sponsors Table Tennis NSW as CFD broker bets in Australia’s youngest

ACY Securities has partnered with Table Tennis New South Wales (TTNSW) for a two-year sponsorship agreement intended to highlight the Chatswood-based multi-asset CFD broker’s brand in Australia, with a focus on the southeastern state.

Executive Moves

Peter Hetherington appointed CEO of Capital.com, Currency.com, and Shares.com

With his extensive experience driving strategy and growth for leading wealth and brokerage firms in highly regulated markets, Peter is the ideal CEO to lead the Group on its next chapter of growth and success.”

Digital Assets

Crypto platform Elwood raises $70m from Goldman Sachs, Dawn, Barclays, BlockFi, Flow, Galaxy, more

Elwood Technologies has closed a $70 million Series A funding round co-led by Europe’s largest B2B investor Dawn Capital and global investment bank, Goldman Sachs.

Industry News

Wilshire to launch Climate Change 1.5℃ Target Index with Nikkei and Hang Seng

Wilshire has announced a collective launch with Nikkei and Hang Seng to bring to market the first in a series of indexes empowering investors to transition their investments towards a low-carbon and climate resilient economy.

Industry News

Anne Boden’s Starling Bank bets big on UEFA Women’s EURO 2022 tournament

Starling Bank has launched a campaign ahead of the UEFA Women’s EURO 2022 tournament as part of its national sponsorship, the biggest ever for the bank.

Industry News

Older adults flock to financial apps as Revolut reports 215% more UK users aged 55-74 since pandemic

Data has also shown that older adults are back to travelling as the 55-64 UK age group has seen a tenfold increase in the amount spent in foreign countries over the past two years, and the 64-75 age group isn’t far behind with an 840% increase.

Industry News

Ripple replies to SEC’s last attempt and “shoves it down their throats pretty hard”

“The SEC really messed that up. How can Hinman receive legal advice from SEC lawyers for a personal opinion?”, attorney Hogan commented.

<