Two US law firms have publicly stated that they are investigating listed multi-asset broker, FXCM, for possible violations of the Securities Exchange Act 1934 10(b) and 20(a). Owners of FXCM shares are believed to be in discussions with the attorneys as investigations into the firm come on the back of the massive price drop on Friday the 16th, which saw the stock diving 90%, and consequently being halted by authorities.
The news adds to FXCM’s worries, as details of the broker’s dealings with Leucadia show that the conditions are tough, coupled with its notification of a $225 million loss on the back of CHF price moves.
Leading attorneys in the US, who specialize in financial markets, are investigating the US-based broker. Robert S. Willoughby of Pomerantz and Eduard Korsinsky of Levi & Korsinsky are investigating the matter.
FXCM, one of the largest and most established forex providers to retail and institutional traders, suffered a hefty loss on the back of the CHF moves. As a result, the firm was in financial difficulty and required emergency bailout. The firm received a $300 million payout by holding firm Leucadia, the firm that owns Jefferies, a financial services institute.
Both attorneys are requesting FXCM shareholders to contact them with details of their stock ownership. FXCM’s share price has been trading in the green with the share price rising fifty percent today.
Both law firms were not available for comment.
One of the law firms, Levi & Korsinsky LLP, has an online form for users to complete and provide details of their holdings. On the website the firm adds a retainer agreement which outlines the costing structure for the investigation. It states: “(Levi & Korsinsky) We agree to advance all expenses in the litigation, which means that you are not liable to pay any of the expenses of the lawsuit, whether attorneys’ fees or costs.
Regardless of the result, we will never ask you to directly pay for any attorneys’ fees or costs. Should we obtain a favorable result, we may ask the court to award us compensation to be paid by the defendants or as a portion of any class benefit, but, again, we will never ask you to directly pay any of the costs of this litigation.”