Last week FXCM announced that it will vigorously defend itself against the class action lawsuit filed against the company alleging false or misleading statements in its IPO prospectus. Drew Niv, CEO of FXCM stated, "It is a regrettable fact of public company life that even a temporary stock price decline often leads to class action litigation. FXCM will always defend itself against these types of meritless claims and I am confident this case will be dismissed."
So, how did we get here? FXCM is certainly not immune to controversy. The company has been there before and survived to become the second largest U.S. Forex broker and an important player internationally. - 1999
Forex Capital Markets (FXCM) was founded in New York City.
- 2001
FXCM became a Futures Commission Merchant (FCM)
- 2003
FXCM entered into a partnership with Refco, one of the largest U.S. futures brokers at that time. Refco acquired a 35% stake in FXCM and licensed the FXCM software for Refco clients. Refco collapsed in October 2005 and FXCM became entrenched in the bankruptcy proceedings for a number of years.
FXCM became regulated by the UK Financial Services Authority (FSA), opened an office in London, and launched DailyFX.com.
- 2007
FXCM passed 100,000 customer accounts
- 2008
The National Futures Association (NFA) obtained permission from the Commodity Futures Trading Commission (CFTC) to increase the minimum capital requirements for Forex Dealer Members (FDM) to $20 million. This requirement shut down a number of smaller FDMs and enabled FXCM to increase its domestic client base.
FXCM opened offices in France and Australia.
- 2009
FXCM UK began offering CFD trading to its non U.S.-based clients in addition to its currency products.
- 2010
FXCM acquired the UK CFD and spread betting provider ODL Securities. The acquisition gave the company a larger presence in the UK and an existing CFD trading and financial spread betting European client base.
- December 1
FXCM had its Initial Public Offering (IPO) and began trading on the NYSE, ticker symbol "FXCM". The IPO price was 14.00 per share.
- 2011
February 10
The Business Trial Group of Morgan & Morgan, P.A. filed a class action lawsuit against FXCM in the United States District Court for the Southern District of New York alleging fraud and racketeering because of deceptive and unfair trade practices.
February 16
Kahn Swick & Foti, LLC (KSF) and Former Attorney General of Louisiana, Charles C. Foti, Jr. announce the commencement of an investigation into FXCM to determine whether it has violated federal securities laws by issuing false and misleading statements to its shareholders.
Citigroup downgraded shares of FXCM and reported declining trading customers. In a reaction to this news, shares of FXCM common stock dropped from a close of $13.70 per share on February 15, 2011 to close at $12.05 per share on extremely heavy trading volume.
February 17
Law Offices of Howard G. Smith announced that it is investigating potential claims on behalf of purchasers of the securities of FXCM Inc. concerning possible violations of federal securities laws.
March 3
Kahn Swick & Foti, LLC (KSF) and KSF partner, Former Attorney General of Louisiana, Charles C. Foti, Jr., announced the commencement of the firm’s securities class action lawsuit against FXCM Inc. The lawsuit was filed in the United States District Court for the Southern District of New York on behalf of purchasers of FXCM common stock pursuant to its December 2010 Initial Public Offering (IPO) of 15,060,000 shares of common stock (with an overallotment option of 2,259,000 shares), priced at $14.00 per share.
March 9
Abraham, Fruchter & Twersky, LLP commenced investigation of FXCM for possible violations of federal securities laws on behalf of investors who purchased FXCM common stock pursuant and/or traceable to the Company's December 1, 2010 IPO.
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