FXCM

FXCM
Company typeSubsidiary
Nasdaq: FXCM
ISINUS3026931069 Edit this on Wikidata
IndustryFinancial services
Founded1999; 25 years ago (1999)
FounderDrew Niv
Headquarters
New York Edit this on Wikidata
Key people
Brendan Callan, CEO[1]
ServicesBroker
Foreign exchange market
ParentJefferies Financial Group
Websitewww.fxcm.com Edit this on Wikidata

FXCM, also known as Forex Capital Markets, is a retail foreign exchange broker for trading on the foreign exchange market. FXCM allows people to speculate on the foreign exchange market and provides trading in contract for difference (CFDs) on major indices and commodities such as gold and crude oil. It is based in London.

The company was banned from United States markets for defrauding its customers.[2][3] Its former parent company, Global Brokerage, Inc. filed for bankruptcy on December 11, 2017.[4] The operating company, known as FXCM Group, is now owned by Jefferies Financial Group, which changed its name from Leucadia National Corporation in 2018.[5] Global Brokerage shareholders lost over 98% of their investment since January 2015.[6]

On February 6, 2017, the firm agreed to pay a $7 million penalty to settle a suit from the U.S. Commodity Futures Trading Commission (CFTC) involving fraudulent misrepresentation by FXCM to its customers and to regulators. FXCM withdrew its CFTC registration and agreed not to re-register in the future, effectively banning it from trading in the United States.[7] Three top managers resigned under regulatory pressure and the majority owner of the firm changed its name to Global Brokerage Inc., effective January 27, 2017.[8][9][10][11]

Global Brokerage filed for bankruptcy in November 2017, but officially reorganized in February 2018. While the company technically owns a 51% equity stake in FXCM Group, its agreement with Leucadia (now Jefferies Financial Group) and FXCM about future distributions of cash flows places its real economic interest in FXCM at 10 to 50%. Jefferies Financial Group remains the de facto parent company of the FXCM Group.[12][13]

A Managing Director of Jefferies Financial Group, which before the bankruptcy held a 49.9% equity stake in the operating company,[14] was appointed chairman of the FXCM Group board.[15] Its U.S. accounts were sold to Gain Capital. About 40,000 customer accounts were sold at about $375 each.[9][16]

  1. ^ "FXCM Group Elevates Brendan Callan to CEO Following Successful Interim Stint". Finance Magnates. Finance Magnates.
  2. ^ Martin, Katie (February 7, 2017). "US regulators slap down FXCM for trading against own clients". Financial Times.
  3. ^ "Exclusive: FXCM UK does not expect market maker repercussions like in the US". LeapRate. May 18, 2017. Retrieved May 18, 2017.
  4. ^ Nikolova, Maria (November 14, 2017). "Global Brokerage expects to commence Chapter 11 bankruptcy case by December 20, 2017". Finance Feeds. Retrieved November 21, 2017.
  5. ^ "Leucadia to shed most non-financial assets, rename as 'Jefferies'". Reuters. April 9, 2018.
  6. ^ "FXCM Split History". Split History.com. Retrieved May 25, 2017.
  7. ^ Atkins, Dorothy (February 6, 2017). "FXCM To Pay $7 M For Hiding Deal With Market Maker". Law360. LexisNexis. Retrieved February 23, 2017.
  8. ^ Chavez-Dreyfuss, Gertrude (February 21, 2017). "FXCM changes company name; appoints interim CEO". Reuters.
  9. ^ a b Nguyen, Lananh (February 24, 2017). "Gain Capital Is Set to Become the Biggest U.S. Retail FX Provider". Bloomberg. Retrieved February 26, 2017.
  10. ^ Linnane, Ciara (February 21, 2017). "FXCM names interim CEO, changes name to Global Brokerage".
  11. ^ "NFA bars New York retail foreign exchange dealer Forex Capital Markets, LLC and its principals Dror Niv, William Ahdout and Ornit Niv from membership". NFA. February 6, 2017. Retrieved February 7, 2017.
  12. ^ Cite error: The named reference LRRebrand was invoked but never defined (see the help page).
  13. ^ "Global Brokerage successfully exits bankruptcy, convertible notes replaced". LeapRate. February 9, 2018. Retrieved May 21, 2018.
  14. ^ "FXCM remains in the game with March volumes up 12% to $225 billion". April 12, 2017. Retrieved April 16, 2017.
  15. ^ "Breaking: FXCM Group Promotes Brendan Callan to CEO Leucadia Appoints Chairman". February 21, 2017. Retrieved April 16, 2017.
  16. ^ "GAIN Capital puts sum paid for FXCM US client accounts at $7.2m at end of Q3'2017". FinanceFeeds. November 9, 2017.