Massive FXCM lawsuit case involves fraud and market manipulation

Plaintiffs filed a massive FXCM lawsuit case in relation to the FXCM securities. After the US CFTC ordered FXCM US market exit and NFA issued official FXCM permanent ban, firm's assets collapsed.

22 June, AtoZForex On Monday, the plaintiffs against Global Brokerage Inc has filed a revised complaint against the firm and 18 other defendants. This includes Global Brokerage Inc’s directors and other senior workers of broker’s accounting department. Reportedly, the complaint is making allegations about fraud, filing false financial statements with regulators and market manipulation.

Massive FXCM lawsuit case

The lawsuit is featuring the 683 Capital Partners, Lo and Shipco Transport Inc. as lead plaintiffs. The plaintiffs have bought the FXCM securities during the Class Period. The securities were deteriorated when in February, the CFTC forced FXCM US Forex market exit. US regulator CFTC has settled charges with the Forex brokerage firm for $7 million in a civil monetary penalty.

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According to the regulator, the fine was imposed at FXCM for engaging in fraudulent and misleading solicitations. Moreover, CFTC has ordered FXCM and CEO Drew Niv to withdraw from the CFTC’s regulation. This has led to the collapse of the securities.

FXCM Federal securities class action

The lawsuit is a federal securities class action that is carried out on behalf of persons and entities, who invested in FXCM securities. This includes FXCM 2.25% Convertible Senior Notes due 2018 and Class A common stock from March 15, 2012, to February 6, 2017 (the “Class Period”).

Misleading reports

According to the FXCM lawsuit details, during the Class Period, the quarterly and annual report from FXCM have been misrepresenting that the FXCM has no interest in the trades executed on its NDD platform. Moreover, the FXCM’s financial statements allegedly breached the US SEC regulations.

Also, FXCM generally accepted the accounting principles for failing to disclose FXCM’s economic interest in contractual and related party relationship with, and control over, Effex.

As a result of FXCM’s failure to properly account for its arrangements with Effex, all of FXCM’s financial statements issued during the Class Period were false and misleading.


During the Class Period, Niv, Ahdout, and Lande directly or indirectly, disseminated or approved false statements. These defendants are accused of having breached §10(b) of the 1934 Act and Rule 10b-5. The complaint stated that they “employed devices, schemes, and artifices to defraud”.

Market manipulation

Furthermore, the complaint states that the FXCM Notes should not have been disclosed to the market since they were unmarketable. In oppose to the information represented in FXCM’s SEC filings, the broker’s US subsidiary engaged in false and misleading solicitations of its retail Forex customers.

Moreover, it made false statements to the NFA about its relationship with its most important market maker, according to the complaint.

FXCM will defend against  lawsuit case

AtoZForex approached Global Brokerage Inc, former FXCM for their comments on this ongoing legal dispute. The following is what they have said:

"Global Brokerage Inc does not comment on on-going legal matters.

As stated in our latest 10Q filed with the SEC “The Company intends to vigorously defend against the claims asserted in these actions."

List of FXCM Lawsuit case defendants

The list of FXCM Lawsuit defendants include Drew Niv, William Ahdout, Robert Lande, Ornit Niv, and Eduard Yusupov. In addition, the list of defendants also includes the name of the new CEO of Global Brokerage, Kenneth Grossman.

Additionally, the list of defendants is including all those, who have ever signed any accounting statements and/or provided other allegedly misleading information to the US financial regulators.

Plaintiffs are seeking an award of compensation for damages in favor of plaintiffs and other class members. The compensation amount will be determined at trial.

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