NY Court Pre-Approves A $6.5M Settlement in A Securities Class Action by FXCM Stockholders

On February 21, 2023, the New York Southern District Court has preliminarily approved a $6.5 million settlement in a securities class action brought by FXCM Inc stockholders. 

The Court preliminarily approved the Settlement, subject to further consideration at a hearing scheduled for July 7, 2023 at 3:00 p.m. under Federal Rule of Civil Procedure 23(e).

All Releasing Parties shall be barred from beginning, prosecuting, or attempting to prosecute any Released Claims against any Released Party in any court, tribunal, or proceeding until the final determination of whether the Settlement should be accepted. Unless and until the Stipulation is cancelled and terminated in accordance with the Stipulation, all proceedings in the Action are stayed and suspended until further order of the Court, with the exception of any procedures required to carry out the terms and conditions of the Stipulation.

The plaintiffs previously claimed that the defendants committed securities fraud by concealing and omitting significant facts about FXCM's covert relationship with Effex Capital, LLC. FXCM provided foreign exchange trading to retail consumers, advertising their "No Dealing Desk" or "agency model," in which FXCM connected the user with a liquidity provider delivering the best price, with FXCM simply adding a mark-up to the price as a commission.

The Settlement provides for a $6,500,000 cash Settlement Fund. In the best-case scenario, Plaintiffs' damages expert calculated maximum aggregate damages of $17.5 million.