Parties in “mega lawsuit” against FXCM Inc push to pause proceedings
To preserve resources for potential settlement, the parties seek a stay of all proceedings while they pursue mediation.
The parties in a lawsuit targeting targeting FXCM Inc, now known as Global Brokerage Inc, are seeking to stay the proceedings. This has been revealed by a joint letter motion filed with the New York Southern District Court on August 20, 2020.
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.
The Letter Motion, submitted at the Court on Thursday and seen by FinanceFeeds, says that the parties request a stay of all proceedings pending completion of a private mediation. The parties have agreed to participate in a private mediation with Jed Melnick, Esq. of JAMS, on September 30, 2020. To preserve the parties’ resources for potential settlement, the parties seek a stay of all proceedings while they pursue mediation.
However, the parties respectfully request that the October 15, 2020 evidentiary hearing granted by the Court remain as scheduled in the event mediation is unsuccessful.
Let’s recall that, 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”.
