The week the entire industry changed: A recap of FXCM’s shameful unraveling

This week represents an absolute milestone which will be remembered for what is likely to be eternity by the entire OTC FX industry.

fxcm

This week is the week which marked the beginning of the complete unraveling of one of the world’s largest and most highly respected FX brokerages, FXCM.

On Monday, February 6, 2017, FXCM along with its CEO Drew Niv and senior Managing Director William Ahdout were permanently prohibited from operating an OTC electronic trading business in the United States, the company’s domestic homeland for trading against customers via a market maker that the company had an undisclosed interest in, with FXCM taking rebates of up to 70% of the profits of the market maker, EFFEX Capital, for its involvement in the scheme, and for hiring a high frequency trader and developing an algorithm to take opposite positions to those held by FXCM clients.

The $7 million fine that was imposed by the Commodity Futures Trading Commission (CFTC) has been paling into insignificance compared to the decimation of the firm’s US entity and its reputation globally, as well as the calling into question of the ability to maintain transparency even among publicly listed, evergreen North American giants.

FinanceFeeds has conducted considerable research on this matter during the course of the week and has reported in detail every aspect from the CFTC’s comprehensive order against the company, to how the fallout will be managed by shareholders as well as commentary from industry executives with regard to how this will affect the future of the FX industry from a compliance and reporting perspective as well as from the standpoint of calling into question the idea that all trades should be executed via centralized venues.

Here is a montage of our detailed coverage during the course of the week. Read more.

 

 

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