Also, the defendants insists that at all times, they acted in good faith and in reasonable reliance upon the representations, reports, expert opinions and advice of others. They believed that those individuals upon whose representations, reports, expert opinions and advice they relied were, in fact, expert in their field and were competent to render the opinions they had provide. The defendants reiterate that they had no notice, and had no reasonable grounds to believe, that the representations, reports, expert opinions and advice provided were in any way inadequate, unfounded or incorrect. According to the defendants, any alleged depreciation in the value of FXCM’s shares resulted from factors other than the misstatements or omissions alleged in the complaint. In December2022, a private mediation took place, which resulted in a decision to resolvethis action completely. On 23 December 2022, both parties executed a bindingterm sheet that set forth the material terms and obligations with respect to thesettlement.
- No later than one week before this conference, the parties have to jointly submit a proposed case management plan and scheduling order.
- The plaintiffs brought claims against FXCM, Dror Niv, and William Ahdout under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b- 5 promulgated thereunder.
- Plaintiffs next allege that FXCM’s financial statements violated GAAP in at least one of two ways.
- The plaintiffs alleged the defendants committed securities fraud by misrepresenting and omitting material facts about FXCM’s secret relationship with Effex Capital, LLC.
- In May 2017, the Court consolidated the related actions, appointed 683 Capital and Shipco as Lead Plaintiffs, and appointed the Rosen Firm as Lead Counsel.
The plaintiffs allege that, for years, FXCM claimed that its “No Dealing Desk” (“NDD”) platform provided its customers with retail Forex trading that was free of conflicts of interest. Unlike other forex trading platforms, FXCM claimed that it had no financial interest in NDD trades. Instead of trading against its customers, FXCM purported to act merely as an agent, collecting small markups and routing customers’ trades to independent “market makers” that provided liquidity to the platform. Plaintiffs propose Shipco Transport Inc. and E-Global Trade and Finance Group, Inc., purchasers of the common stock, and 683 Capital Partners, LP, a Notes purchaser, as class representatives. The case launched by investors in FXCM securities relates to the events from February 2017, when the broker announced settlements with the US authorities in a move that led to FXCM’s exit from the US retail FX market. In response to the CFTC and NFA orders, the price of FXCM’s stock and the FXCM Notes dropped sharply, damaging investors.
While Plaintiffs believe that they would be able to prove their claims at trial, Defendants have denied and continue to deny liability and damages. Even at this late stage of the litigation Plaintiffs faced significant challenges in obtaining a full judgment on their claims, including defeating Defendants’ motions in limine, prevailing at trial on complex securities fraud claims, prevailing on Plaintiffs’ expert’s view of the full measure of damages, and prevailing on the expected post-trial motions and appeal. The Judge has also approved the request to appoint a Class Counsel, with the Rosen Law Firm, P.A. The plaintiffs are ifc markets review pursuing claims on behalf of a class of FXCM investors 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.
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That is why, according to the plaintiffs, the Court should approve the Settlement as fair, reasonable, and adequate, and it should likewise approve the Plan of Allocation. These arms-length negotiations among experienced counsel with a neutral mediator, along with the positive reaction of the Class render the Settlement presumptively fair. Mr. Friedman and Mr. Hallac will be replacing former directors Drew Niv and William Ahdout, both of whom have been banned from the National Futures Association (NFA).
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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 reasoning for it, is due to the fact that the defendants in question did not make any misleading or false statements in regards to material facts, nor did they omit to state any material facts, as well. In addition, the defendants argue that all of the plaintiffs are not adequate class representatives, “having abdicated their duty to participate meaningfully in discovery”. There’s been another development in the large lawsuit targeting Global Brokerage, Inc. formerly known as FXCM Inc., Dror Niv, and William Ahdout.
Yesterday, both individuals were hit with a $7.0 million fine from the Commodity and Futures Trading Commission (CFTC) for allegations of defrauding customers. Plaintiffs and defendants Dror Niv and William Ahdout have agreed to settle this action for $6,500,000. According to the defendants, the complaint fails, in whole or in part, to state a claim upon which relief can be granted.
- Unlike other forex trading platforms, FXCM claimed that it had no financial interest in NDD trades.
- The Court concludes, however, that the second amended complaint adequately alleges that the remaining defendants have committed securities fraud with respect to statements or omissions concerning FXCM’s supposed agency-trading model, the Company’s purported “order flow” payments with Effex, and Generally Accepted Accounting Principles (“GAAP”).
- Effex became one of FXCM’s biggest liquidity providers and Defendants provided special trading advantages to direct more of FXCM’s trading volume to Effex.
- FXCM also provided Effex with millions in start-up capital, allowed Effex to operate out of FXCM’s offices rent-free, and designated two FXCM employees to work for Effex.
- On the 21st of May, 2020, William Ahdout, Dror Niv, and Global Brokerage Inc all filed their answer to this third-amended complaint within the case.
- Several months after the plaintiffs submitted their motion for class certification, the defendants have filed their reply.
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They havedenied that the plaintiffs or participants in the lawsuit have suffered damagesas a result of any of the conduct alleged in the case. Effex became one of FXCM’s biggest liquidity providers and Defendants provided special trading advantages to direct more of FXCM’s trading volume to Effex. The Settlement resolves this litigation, between Plaintiffs and Defendants FXCM, Dror Niv, and William Ahdout that has continued for more than six years. FastMatch, Inc., an Electronic Communication Network (ECN) for foreign exchange trading, has appointed two new members to its board of directors, adding Leucadia National Corporation’s President, Brian Friedman, and the group’s Managing Director, Jimmy Hallac, according to a FastMatch statement. In 2009, FXCM began to develop a high frequency trading algorithm to trade against unsuspecting customers on its NDD platform. As FXCM prepared to go public in 2010, the company’s compliance department voiced serious concerns over trading against FXCM’s customers while explicitly promoting the NDD platform as “conflict-free.” To avoid scrutiny, FXCM spun off the trading operations as a purportedly “independent” company, Effex Capital, LLC.
The Notes were issued under Rule 144A and, therefore, were purchased by large institutional investors. Additionally, Notes purchasers in the initial offering and before the Notes began trading on June 24, 2014 cannot be included in the putative Notes Class. More significantly, the holders of the vast majority of the Notes have waived and released any securities claims they might have against Defendants under a forbearance agreement they entered into with the company in 2019. According to the defendants’ response, seen by limefx FinanceFeeds, the plaintiffs have to prove that the proposed class complies with the requirements of Rule 23. A district court must conduct a rigorous analysis of Rule 23’s requirements before certifying a class.
On February 3, 2023, the parties in this lawsuit filed a proposed settlement with the New York Southern District Court. Shipco Transport Inc. and E-Global Trade and Finance Group, Inc., on behalf of themselves and the certified Class, submitted the documents for Preliminary Approval of the Class Action Settlement. Further, the defendants argue that the alleged misrepresentations are non-actionable statements that contain expressions of opinion that the plaintiffs have not alleged, and cannot prove, were not truly held.
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The plaintiffs bring claims against FXCM, Dror Niv, and William Ahdout under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b- 5 promulgated thereunder. However, according to the plaintiffs, unbeknownst to FXCM’s customers and investors, FXCM was secretly receiving kickbacks of roughly 70% of the trading profits from Effex, one of FXCM’s primary liquidity providers who was trading against FXCM’s customers. The plaintiffs also contended that the defendants were responsible for false and misleading statements with respect to the order flow arrangements themselves. The Court concludes that, at this stage of the proceedings, the plaintiffs have sufficiently alleged that FXCM’ s public misstatements about these payments were at the very least misleading. The “mega lawsuit” brought by investors of axitrader review Global Brokerage, Inc. formerly known as FXCM Inc, continues at the New York Southern District Court. Several months after the plaintiffs submitted their motion for class certification, the defendants have filed their reply.
This only applies, however, if these purchases were made during the period between the 15th of March, 2012 and the 6th of February, 2017. The second amended complaint alleges that shares of FXCM’s stock fell over 49% and FXCM’s Notes fell 37% the day after the announcement of the settlement with the US regulators. The Court concludes that the plaintiffs have adequately alleged that FXCM’s drop in stock price was caused by the regulatory investigations’ disclosure of the defendants’ purported fraud, and that the plaintiffs have properly pleaded loss causation. “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”. The legalrepresentatives of Global Brokerage, Inc., formerly known as FXCM Inc. (FXCM), Drew Niv, and William Ahdout, have filed a proposed settlement with the lead plaintiffsof the class-action lawsuit, E-Global Trade and Finance Group, Inc. (E-Global),L.P., and Shipco Transport Inc. (Shipco).
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Yet, the defendants say, the plaintiffs fail to show that they could isolate the impact of these collateral consequences from losses arising from the alleged fraud. The defendants argue that the plaintiffs further fail to show that they could calculate the price drop had the alleged “truth” been revealed by FXCM earlier (i.e., any price inflation attributable to the alleged misstatements). Eventually, the United States Commodity Futures Trading Commission (CFTC) and National Futures Association (NFA) brought regulatory actions against FXCM based on the brokerage’s undisclosed relationship with Effex. On February 6, 2017, the CFTC announced that it had banned the company from operating in the US after finding that FXCM was taking undisclosed positions opposite its retail customers.
Stockholders of FXCM Inc, now known as Global Brokerage Inc, have filed a motion for final approval of their settlement with FXCM, Drew Niv and William Ahdout. The main theme of the complaint was related to the advertisement of the broker’s ‘no dealing desk’ model as superior to the company’s competition. FXCM presently is a passive minority owner of FastMatch, with FastMatch operating as a completely independent entity of FXCM. According to yesterday’s complaint filed by the NFA, FXCM, as well as Mr. Niv and Mr. Ahdout, on numerous occasions failed to adequately supervise its employees. After briefing, the Court issued an Order on March 28, 2019 denying in part the defendants’ motion to dismiss as to Defendants FXCM, Niv, and Ahdout. Plaintiffs’ damages expert estimated maximum aggregate damages of $17.5 million in Plaintiffs’ best-case scenario.
Specifically, the plaintiffs allege that the defendants were responsible for false or misleading statements with respect to the company’s purported agency-trading model and FXCM’s relationship with another company, Effex. FXCM installed John Dittami, who had overseen development of the trading algorithm, to head Effex. FXCM entered into a sham “services agreement” by which it would retain 70% of Effex’s trading profits, disguised as “order flow” payments. FXCM also provided Effex with millions in start-up capital, allowed Effex to operate out of FXCM’s offices rent-free, and designated two FXCM employees to work for Effex.