US Judge grants plaintiffs' motion for a class action against Global Brokerage, Inc. formerly known as FXCM Inc. What led the plaintiffs to file such a lawsuit against the former FXCM in the first place?
09 January, 2020 | AtoZ Markets – At the start of this week, a US judge has granted the motion of the plaintiff for the class action against Global Brokerage Inc. Global Brokerage Inc, which was formerly known as FXCM Inc. Since FXCM changed its name in May 2018. Around the same period in 2018, Global Brokerage, Inc. also received a delisting notice from NASDAQ. Since Global Brokerage, Inc. was no longer meeting NASDAQ's listing criteria.
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Why did the Plaintiffs Filed a Class Action?
On 6 January, 2020, the class certification motion was brought to the New York South District Court by the main plaintiffs in this case. The plaintiffs were 683 Capital Partners, LP and Shipco Transport Inc. and Sergey Regukh. The plaintiffs are filing a lawsuit on behalf of a class of FXCM investors. The lawsuit is under articles 10 (b) and 20 (a) of the 1934 Securities Exchange Act and it is against FXCM, Dror Niv, and William Ahdout. The proposed class action is defined as:
"All persons and/or entities who have purchased or otherwise publicly traded Global Brokerage, Inc., f/k/a FXCM Inc. securities. It includes FXCM 2.25% Convertible Senior Notes due in 2018 and common stock Class A, in the period from 15 March 2012 to 6 February 2017".
The following are excluded from the class:
i. The Defendants;
ii. The current and former officers, employees, consultants and directors of FXCM and FXCM Holdings, LLC;
iii. Siblings, parents, children, spouses and family members of any person excluded under (i) and (ii);
iv. Any entity affiliated, controlled by, or owned more than 5% by, any person excluded under (i) to (iii);
v. The legal representatives, heirs, successors or assigns of any person excluded under (i) to (iv).
FXCM has argued that its "No Dealing Desk" ("NDD") platform has provided its customers with conflict-of-interest retail Forex trading. Unlike other forex trading platforms, FXCM has claimed that it has no financial interest in NDD trading. Instead of trading against its customers, FXCM purported to act simply as an agent. It was collecting small markups and directing customer operations to independent "market makers" who provided liquidity to the platform. These arguments, according to the plaintiffs were false. Hence, the FXCM investors are now filing a class action against the former FXCM Inc.
Read More: Mark Karpeles Seeks for Dismissal of Mt. Gox Class Action Suit
The Plaintiff’s Motion for Class Certification has been Granted
According to court documents, Honorable Ronnie Abrams, a US district judge granted the class action on 6 January 2020. The US judge considered the motion for class certification and the appointment of Class Representatives and Counsel.
The judge also approved the request to appoint a Class Counsel, with the Rosen Law Firm, PA nominated for the role. The plaintiffs are filing a lawsuit on behalf of a class of FXCM investors against Global Brokerage, Inc.
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