mdimport
5 years ago
CFTC asks for more time to determine stance in lawsuit about FXCM publications
March 20, 2019, 9:32 am UTC
The CFTC asks for more time to decide on its position in a lawsuit targeting NFA’s publications about FXCM from February 2017.
The lawsuit launched by Effex Capital, the entity embroiled in FXCM’s exit from the US retail FX market, targeting the National Futures Association (NFA) keeps getting protracted. As FinanceFeeds has reported, the Seventh Circuit U.S. Court of Appeals has invited the Commodity Futures Trading Commission (CFTC) to have its say on the matter by filing the so-called amicus brief. The CFTC has already been granted a reprieve to determine its stance – until March 25, 2019. However, the US regulator has now asked for another extension of time to decide on whether to file such a brief.
On Tuesday, March 19, 2019, the CFTC submitted a Motion with the Court, requesting a second extension of time to file possible amicus brief. The regulator wants an additional two-week extension of time to determine whether to file an amicus brief, and, if so, to file one. The deadline would thereby move from March 25, 2019 (pursuant to the Court’s grant of the CFTC’s previous motion to extend time) to April 8, 2019.
The CFTC notes that a decision to file an amicus brief in this case must be approved by the Commission (i.e., the five CFTC commissioners appointed by the President and confirmed by the Senate). The CFTC Office of the General Counsel has made a recommendation to the Commission with regard to an amicus brief. However, in light of the issues raised by this case as well as other pressing issues currently before the agency, the Commission will not be able to complete its deliberations with regard to an amicus brief by March 25. The CFTC therefore requests an additional extension.
Let’s recall that the case is about NFA’s publications from February 2017 related to FXCM.
Effex Capital, LLC brought this action in the United States District Court for the Northern District of Illinois. It alleged that NFA committed a raft of state law torts, violated the Illinois Trade Secret Act, and violated the Fifth Amendment’s Due Process Clause through its actions regarding a settlement between the NFA and its member Forex Capital Markets, LLC (FXCM). In particular, Effex claims that the NFA made false and misleading statements about it in four NFA documents relating to the FXCM settlement: a Complaint, a Decision, a Narrative of the Decision, and a Press Release.
According to Effex, these statements are defamatory, interfere with its business relations, and include confidential and proprietary information. Furthermore, Effex argues that it was deprived of procedural due process because, as a non-party to the settlement and non-member of the NFA, it was unable to participate in the settlement between the NFA and FXCM and did not have the opportunity to contest references to it in the related settlement documents. Effex seeks injunctive relief as well as money damages.
Effex asked for a preliminary injunction; the NFA moved under Federal Rule of Civil Procedure 12(b)(6) to dismiss the action. The district court determined that Effex had failed to exhaust its administrative remedies under the Commodity Exchange Act and dismissed without prejudice. The District Court advised Effex to pursue administrative remedies and then seek review of properly exhausted claims. Effex appealed.
On December 4, 2018, the Seventh Circuit U.S. Court of Appeals filed an Order inviting the CFTC to file a brief as “amicus curiae” in this case within ninety days from the date of the order. An amicus curiae is someone who is not a party to a case and is not solicited by a party, but who assists a court by offering information that bears on the case.
When inviting the CFTC’s opinion, the Appeals Court noted that the District Court premised its dismissal on a variety of possible avenues that Effex could have taken to seek review of the NFA’s actions by the CFTC.
https://financefeeds.com/cftc-asks-for-more-time-to-determine-stance-in-lawsuit-about-fxcm-publications/
Current $GLBR chart with a Golden Cross:
mdimport
5 years ago
Ex-FXCM clients suffer defeat in Court as lawsuit against Effex Capital dismissed
February 2, 2019, 9:45 am UTC
"... A legal action targeting Effex Capital, the company embroiled in FXCM’s exit from the US retail Forex market, was terminated on February 1, 2019, after the New York Southern District Court issued an order against former clients of FXCM Inc.
Let’s recall that this lawsuit was launched by Arthur P. Cardi, Bikram Randhawa, Mark Govers, Rosimara Tadrous, Steven Plunger – former customers of FXCM Inc, now known as Global Brokerage Inc (OTCMKTS:GLBR).
The plaintiffs have brought the action on behalf of themselves and all other former customers of FXCM Inc; Forex Capital Markets, LLC; and FXCM Holdings, LLC, in an effort to recover the damages they and the Class suffered as a result of the alleged fraud perpetrated by Effex Capital, Dittami and FXCM. The customers say they were led to believe that FXCM provided a conflict-free retail Forex trading platform, whereas, in fact, the opposite was true: FXCM had a hidden relationship with Effex, which held positions opposite to orders placed by the Class and could (unlike other liquidity providers) view non-public details of those orders, and then engaged in abusive practices—all to the benefit of Effex, Dittami and FXCM.
The plaintiffs argue that Effex was central to this misconduct, as it was the secret liquidity provider that FXCM was penalized for concealing from its customers. Effex and Dittami should be held responsible for the damages they caused to the Class during the seven-year Class Period—which far exceed those identified by the CFTC, according to the ex-clients of the broker.
The plaintiffs stress that Effex deprived them of positive slippage and gave them negative slippage—when it would benefit Effex’s and FXCM’s bottom line. Two of the most egregious practices were the Hold Timer, and Previous Quote functions. Effex used both of these abusive practices to harm FXCM’s customers. Furthermore, all trades that were routed to Effex were denied best execution and the possibility of a better price—i.e. positive slippage—because the other liquidity providers were not allowed to compete to provide a better price to the traders.
The plaintiffs insist that Effex and Dittami knew FXCM intended to violate the CEA because they operated hand-in-glove. Also, without Effex’s participation, FXCM could not have violated the CEA. Because FXCM created Effex to secretly trade against its customers, Effex did more than “provide normal clearing services to a primary broker.”
The Court, however, has agreed to grant the defendants’ motion to dismiss. As per the Order issued on Friday, February 1, 2019, the plaintiffs have failed to plead with particularity violations of the CEA and have also failed to state a claim.
The Court ruled that the plaintiffs’ complaint does not indicate that the ex-FXCM clients suffered any actual damages as a result of the alleged fraud run by Effex and its CEO John Dittami. Instead, the plaintiffs are said to have produced “speculative and unsupportive statements”. Pointing to rebate payments as equal to losses suffered by former FXCM customers is not indicative of any damage, the Court determined.
Furthermore, the former clients of FXCM have not alleged sufficient nexus between them and Effex or Dittami. Effex or Dittami were not parties to any contracts with FXCM clients nor did they have direct dealings with them. Hence, the plaintiffs were found to have failed to made the requisite showing for Effex’s unjust enrichment.
The plaintiffs have 30 days to file a notice of appeal in case they wish to do so. ..."
https://financefeeds.com/ex-fxcm-clients-suffer-defeat-court-lawsuit-effex-capital-dismissed/
mdimport
5 years ago
Global Brokerage manages to secure partial dismissal of “mega lawsuit”
March 1, 2018, 8:57 pm UTC
"... There is an update on the “mega lawsuit” against Global Brokerage Inc (OTCMKTS: $GLBR), formerly known as FXCM Inc, from the New York Southern District Court, where an oral argument in the case brought by investors in the public securities of the company was held earlier today.
Information is scarce at this point but what is clear is that the Judge Ronnie Abrams partially granted and partially denied the defendants’ motion to dismiss the case.
The Court denied FXCM’s motion to the degree that it concerns the allegations against the broker made in the regulatory settlements from February 2017 with the United States Commodity Futures Trading Commission and the National Futures Association.
Let’s recall that the broker had wanted the Court to strike all allegations in the plaintiffs’ Complaint that refer to, or rely upon, the allegations contained in the unadjudicated CFTC Order and NFA Complaint. In short, the broker had claimed that the plaintiffs had inappropriately cribbed the entirety of their purported factual allegations from the unadjudicated CFTC Order and NFA Complaint, which were said to be insufficient to support the plaintiffs’ claims. The Court today disagreed with the broker in this respect.
However, FXCM Inc and a number of its former and current top officers managed to secure a win when it comes to the rest of their Motion to Dismiss. That is, the Court agreed that FXCM’s NDD statements are not misleading. Let’s note that the company’s statements started with “we believe” the NDD model “aligns our interests with those of our customer,” thus merely meaning, according to the defense, that the company was expressing its opinion.
The Court also agrees that the plaintiffs have not managed to prove scienter against FXCM.
This is not the end to the case, as the plaintiffs are granted leave to amend, and they must file their amended complaint by April 6, 2018. Defendants shall have until May 7, 2018, to file their response.
The so-called “mega lawsuit” is a class action on behalf of investors in the public securities of FXCM Inc. A putative class consists of all persons and entities who purchased or otherwise acquired publicly traded FXCM securities from March 15, 2012 to February 6, 2017.
The complaint alleged that FXCM misled its clients, investors and the regulators by claiming that the company’s “No Dealing Desk” (NDD) platform would provide its customers with a Forex trading platform that was free of conflicts of interest. As a result of the investigations by the CFTC and NFA, the allegations and penalties announced in February 2017, the price of FXCM’s stock dropped sharply, losing more than half of its value and damaging investors.
The complaint also alleged that each of the individual defendants directly participated in the management of the company and was aware of or recklessly disregarded the fact that the false and misleading statements were being issued concerning the company.
The case is captioned In re Global Brokerage, Inc. f/k/a FXCM Inc. Securities Litigation (1:17-cv-00916). ..."
https://financefeeds.com/global-brokerage-manages-secure-partial-dismissal-mega-lawsuit/
mdimport
5 years ago
Court grants CFTC more time to decide on its stance in case about FXCM publications
February 18, 2019, 9:45 am UTC
The CFTC has until March 25, 2019, to decide whether to file a brief concerning NFA’s publications about FXCM from February 2017.
"... Shortly after the United States Commodity Futures Trading Commission (CFTC) asked the Seventh Circuit U.S. Court of Appeals to give it more time to determine its stance in a lawsuit targeting the National Futures Association (NFA), the Court has granted the CFTC request.
In an order entered on February 15, 2019, the Court agrees that the amicus brief of the Commodity Futures Trading Commission, if any, shall be due by March 25, 2019. This means a three-week extension for the US regulator, so that it may decide whether or not to file a brief in which to state its position on the allegations made by Effex Capital, the company involved in FXCM’s US retail FX market exit, against NFA. ..."
https://financefeeds.com/court-grants-cftc-time-decide-stance-case-fxcm-publications/
mdimport
5 years ago
Derivative stockholder lawsuit targeting Global Brokerage and Drew Niv may be close to its end
February 28, 2019, 11:14 pm UTC
A lawsuit focused on the events from January 15, 2015 and the loan from Leucadia that FXCM Inc’s directors agreed to back then may be close to its end.
"... A lawsuit brought by Brett Kandell, a stockholder of FXCM Inc, now known as Global Brokerage Inc (OTCMKTS:GLBR), may be close to its end, as the parties in the case have reached a settlement. The notice concerning the agreement, which has yet to be approved by the Court, has been published by Global Brokerage.
Under the terms of the settlement, the defendants shall caused to be paid on their behalf $1,550,000 to the broker. That is, the benefits will go to the company and not to the stockholders.
The released claims include, inter alia, all claims related to the events from January 15, 2015, as well as the decision of the Board of Directors of the company to approve the Leucadia loan.
Stockholders who held shares in FXCM Inc (Global Brokerage Inc) as of January 16, 2019 and who continue to hold stock, have the right to object to the proposed settlement. They have the right to be heard at the Settlement Hearing to be held before the Honorable Sam Glasscock III on June 5, 2019, at the Delaware Chancery Court. ..."
https://financefeeds.com/derivative-lawsuit-targeting-global-brokerage-drew-niv-may-close-end/
mdimport
5 years ago
Trading action is suggestive that the litigation which has followed $GLBR is about to be positively resolved.
"... There has been a slight change in the timing of the proceedings in the lawsuit launched by investors in FXCM Inc, now known as Global Brokerage Inc (OTCMKTS:GLBR). The New York Southern District Court has rescheduled the oral argument on the defendants’ Motion to Dismiss the case against them.
The argument had initially been scheduled for February 27, 2019, but today Judge Ronnie Abrams signed an order granting a request by the plaintiffs to reschedule the argument. It is now set to happen on March 6, 2019. ..."
https://financefeeds.com/ny-court-reschedules-oral-argument-mega-lawsuit-fxcm-inc/
Trading volume has picked up. Earlier today, 10,000 shares were showing on the Ask at $0.1999. There are now only 5,000 shares showing on the Ask at $0.1999.
Golden Cross starting to form in $GLBR right before its oral argument on 03/06/2019. The Golden Cross should form around $0.08, but most likely in the upper $0.07 range.
Golden Cross Definition from Investopedia: https://www.investopedia.com/terms/g/goldencross.asp
Key Takeaways
- The golden cross is a technical chart pattern indicating the potential for a major rally.
- The golden cross appears on a chart when a stock’s short-term moving average crosses above its long-term moving average.
Lone Wolf
6 years ago
Global Brokerage, Inc. Successfully Completes Prepackaged Plan of Reorganization; Emerges from Chapter 11 Bankruptcy
GlobeNewswire "Press Releases"
NEW YORK, Feb. 08, 2018 (GLOBE NEWSWIRE) -- Global Brokerage, Inc. (NASDAQ:GLBR) ("Global Brokerage"), announced the effective date of its Prepackaged Chapter 11 Plan of Reorganization of Global Brokerage, Inc. (the Plan), which was confirmed by Bankruptcy Judge Michael E. Wiles on January 22, 2018, occurred on February 8, 2018. The overall purpose of the Plan was successful, and the new secured notes have been distributed in accordance with the Plan.
Disclosure Regarding Forward-Looking Statements
In addition to historical information, this earnings release may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Exchange Act and/or the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements preceded by, followed by, or including the words "believes," "expects," "anticipates," "plans," "estimates," "projects," "forecasts," or similar expressions. Examples of forward-looking statements in this news release are statements about the expected terms and timing of the Plan, the expected SEC deregistration and the financial impact on Global Brokerage, including reduced expenses, resulting from the restructuring transactions. These forward-looking statements are not historical facts and are based on current expectations, estimates and projections about Global Brokerage's industry, business plans, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, readers are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict including, without limitation, risks associated with Global Brokerage's strategy to focus on its operations outside the United States, risks associated with the events that took place in the currency markets on January 15, 2015 and their impact on Global Brokerage's capital structure, risks associated with Global Brokerage's ability to recover all or a portion of any capital losses, risks relating to the ability of Global Brokerage to satisfy the terms and conditions of or make payments pursuant to the terms of the finance agreements with Leucadia, as well as risks associated with Global Brokerage's obligations under its other financing agreements, risks related to Global Brokerage's dependence on FX market makers, market conditions, risks associated with the outcome of any potential litigation or regulatory inquiries to which Global Brokerage may become subject, risks associated with potential reputational damage to Global Brokerage resulting from its sale of US customer accounts, and those other risks described under "Risk Factors" in Global Brokerage's Annual Report on Form 10-K, Global Brokerage's latest Quarterly Report on Form 10-Q, and other reports or documents Global Brokerage files with, or furnishes to, the SEC from time to time, which are accessible on the SEC website at sec.gov. This information should also be read in conjunction with Global Brokerage's Consolidated Financial Statements and the Notes thereto contained in Global Brokerage's Annual Report on Form 10-K, Global Brokerage's latest Quarterly Report on Form 10-Q, and in other reports or documents that Global Brokerage files with, or furnishes to, the SEC from time to time, which are accessible on the SEC website at sec.gov.
About Global Brokerage, Inc.
Global Brokerage, Inc. (NASDAQ:GLBR) is a holding company with an indirect effective ownership of FXCM Group, through its equity interest in Global Brokerage Holdings, of between 10 50% depending on the amount of distributions made by FXCM Group.
Investor Relations
investorrelations@globalbrokerage.info
Primary Logo
Source: Global Brokerage, Inc.
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