June 14, 2024

Investments & Exits

FXCM Settles $6.5m Lawsuit After 6 Year Battle

The legal representatives of Global Brokerage, Inc., formerly known as FXCM Inc. (FXCM), William Ahdout and Drew Niv, have reached a settlement with the lead plaintiffs of the action lawsuit, E-Global Group, Inc., Shipco Inc., and L.P. On 3 Feb 2023, court documents seen by Finance Magnates showed that the proposed settlement amount was $6,500,000. This figure corresponds to 37% of the potential damages estimated by the investors at $17.5 million in the most positive case.

The investigation into the legal case against FXCM began in February 2017, when Tony Khoury filed the first of four associated shareholder actions alleging a violation of the Securities Exchange Act of 1934. After more than six years of investigations, the parties involved in the case have come to a settlement in order to fully and finally compromise and release any claims against the released parties.

As part of the suit, plaintiffs wanted individuals and entities who bought Global Brokerage, Inc.’s Class A common stock between 15 March 2012 and 6 February 2017 to be able to seek recompense.

To finally resolve the action, a private mediation was held in December 2022, resulting in a binding term sheet being signed by both parties on 23 December 2022. This document laid out the material terms and obligations of the settlement.

As a requirement of the settlement, the respondents have maintained their position that the plaintiffs or others engaged in the litigation have not incurred any injury as a result of the behavior that is being questioned in the case. This assertion is part of the defendants’ defense.

They have made it clear that they will not acknowledge any charges of wrongdoing, misconduct, or damage that may have been caused by the actions in question. Because of the potential costs, disruptions, delays, and uncertainty that are connected with the lawsuit, the defendants are willing to settle the dispute via the Settlement that is outlined in this Stipulation. In addition, the paper said that the Individual Defendants continue to be of the opinion that the allegations made against them are baseless.

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