NY Judge orders consolidation of two cases brought by ex-FXCM clients
The two consolidated cases are brought by former FXCM clients who allege they suffered harm as a result of the undisclosed relationship between FXCM and Effex Capital.
Judge Paul A. Crotty, of the New York Southern District Court, on Thursday ordered the consolidation of two legal actions brought by former clients of FXCM, who allege they suffered damages as a result of the undisclosed relationship of the broker and Effex Capital.
The order comes in response to a motion by the plaintiffs to consolidate the two cases – Cardi et al v. FXCM, Inc. et al (1:17-cv-04699) and Nguyen v. FXCM Inc. et al (1:17-cv-02729).
In the order, seen by FinanceFeeds, Judge Paul A. Crotty attributes his decision to the fact that the two actions present similar factual and legal issues, as they both involve the same subject matter, and present, for the most part, the same legal issues. Both actions are securities/commodities/exchange actions with a similar fact pattern and the same defendants, including Global Brokerage Inc (NASDAQ:GLBR), formerly known as FXCM Inc, Forex Capital Markets LLC, Global Brokerage Holdings, Drew Niv, William Ahdout, Effex Capital and John Dittami.
Also today, the Court named the law firms of Gainey McKenna & Egleston and Levi & Korsinsky, LLP as Interim Co-Lead Counsel for the consolidated actions. The list of responsibilities of the Interim Co-Lead Counsel include, inter alia, coordinating the preparation and filing of a Consolidated Amended Complaint, and any subsequent pleadings, as well as coordinating the briefing and argument of all motions.
Interestingly, Vantalie Nguyen (one of the plaintiffs) and FXCM have agreed to stay the proceedings against the so-called FXCM defendants: Global Brokerage Inc (NASDAQ:GLBR), Forex Capital Markets LLC, Global Brokerage Holdings, Drew Niv, and William Ahdout, pending arbitration. The stay is due to the fact that Nguyen is a former client of FXCM and that the Client Agreement contained an arbitration clause.
FXCM is also defending itself in a “mega” lawsuit brought by a class of plaintiffs who bought securities in the company and allege harm as a result of the drop in the share price of the company following the February 2017 settlements between the broker and US regulators. Earlier this month, the so-called FXCM defendants filed a Motion to dismiss the class action. In the document, the allegations made by the plaintiffs are called “boilerplate mantra” and the broker claims that its agreement with Effex did not harm FXCM retail customers or cause them to lose money on their trades. The company also argues the agreement “provided significant financial benefits to FXCM customers”.
The legal actions continue at the New York Southern District Court.
