Pomerantz LLP announces that a class action lawsuit has been filed against FXCM Inc. (“FXCM” or the “Company”) and certain of its officers. The class action, filed in United States District Court, Southern District of New York, is on behalf of a class consisting of investors who purchased or otherwise acquired FXCM securities, seeking to recover compensable damages caused by defendants’ violations of the Securities Exchange Act of 1934.
FXCM is an agency that provides online foreign exchange (FX) trading and related services to retail and institutional customers. The Company acts as a credit intermediary, simultaneously entering into trades with the customer and the FX market maker, which allows customers to trade currency pairs on the over-the-counter foreign exchange markets.
The complaint alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) between September 4, 2009 through at least 2014, FXCM’s U.S. subsidiary engaged in false and misleading solicitations of its foreign exchange customers by concealing its relationship with its most important market maker and by misrepresenting that its “No Dealing Desk” platform had no inherent conflicts of interest with the Company’s customers; (ii) FXCM’s U.S. subsidiary made false statements to the National Futures Association regarding the Company’s relationship with the market maker; (iii) accordingly, FXCM had misled investors with respect to the Company’s adverse position to its retail customers; and (iv) as a result of the foregoing, FXCM’s public statements were materially false and misleading at all relevant times.
On February 6, 2017, the U.S. Commodity Futures Trading Commission (“CFTC”) issued an order, fining FXCM and its founding partners, Dror Niv and William Ahdout $7 million for defrauding retail forex customers.
On that same day, FXCM issued a press release, filed on Form 8-K with the SEC on February 7, 2017, entitled “FXCM US Reaches Settlement with NFA and CFTC,” announcing the Company’s withdrawal from U.S. markets.
On this news, FXCM’s share price fell $3.40, or 49.64%, to close at $3.45 on February 7, 2017.