FXCM, credited as the largest forex broker in the world has been in the news a lot lately, emanating from the severe losses suffered by the company amounting to $225million on client account negatives during the Swiss “Black swan” event on January 15.
In an attempt to clear the air and calm the nerves of clients and investors, the company put out an update on its business as well as a statement from Chief Executive Officer, Drew Niv, on FXCM's month-to-date metrics along with the firm's current plans to pay down its debt. Richard Handler, Chief Executive Officer, and Brian Friedman, President of Leucadia had some things to say. Below is a full coverage of their comments:
Drew Niv CEO of FXCM;“A week after the unprecedented movement of the Swiss Franc, and our financing agreement with Leucadia, FXCM continues to operate in the normal course of business. All of our entities have capital in excess of regulatory requirements. As our month-to-date metrics show, FXCM continues to be a global leader in retail FX with volumes on pace to set a record. We are especially thankful for our customers' loyalty and support," "The financing we received from Leucadia has strengthened our balance sheet and gives us the opportunity to grow our core business while reducing our debt through the sale of non-core assets. We anticipate that the proceeds from these sales and continued earnings, we can meet both near and long term obligations of our financing, while preserving the strength of our franchise." Richard B. Handler, Chief Executive Officer, and Brian P. Friedman, President of Leucadia;"We view FXCM as our next opportunity to work with an investee company to create long-term value for all stakeholders, including FXCM's dedicated employees and customers. We look forward to assisting Drew Niv and his team to develop the liquidity opportunities to repay last week's emergency financing and then, as the long-term investors we are, to exercising the patience and diligence needed to maximize the value of FXCM over time as we strive to do for every investment in our portfolio, many of which we have held for the long term, and, in some cases, for over a decade."
The statement also showed FXCM’s year to date volume to be $406 billion with 30% coming from the last 5 days alone, which included a U.S. bank holiday, holding tradable accounts of 224,547, and client equity was $1 billion as of January 22 with an average of $27billion in daily volumes by retail customers during this period.
This results are quite impressive, considering a firm which almost filled for bankruptcy about a week ago and condemned for requesting clients to pay back negative balances on accounts as they threatened to use money from funded accounts to off set negative balances for client who hold multiple accounts with them. The firm is still under serious scrutiny by law firms who believe shareholders have been treated unfairly. Click here to read up on the news.