CFTC fines FXCM and its Founding Partners for Defrauding Retail Forex Customers. FXCM to Deregister.

Jason Rogers

FXCM Representative
Messages
511
Wow! I'm an ECN/STP broker which passes trades on to external LPs - except the biggest LP is under the same ownership and sits inside the same office.

I have to say I find this to be bitterly disappointing. Too bad the CFTC didn't send Drew and William off to spend a couple years in Club Fed, followed by a public caning.

Hi Pharaoh,

While I cannot speak about the NFA or CFTC complaint specifically due to the nature of our settlement, I can say that we have settled with the NFA and CFTC without admitting or denying any of their allegations or claims. Effex Capital is no longer pricing FXCM's NDD forex price feed. Note FXCM would not have suffered more than $200 millon dollars in losses during the SNB flash crash had it been taking the other side of client trades – unlike so many of the DD firms in the industry.

I can also discuss with you FXCM's execution practices outside of the US. FXCM uses 16 liquidity providers to create a best bid best offer price stream for clients. LPs selected to price retail clients are forced to adhere to an extremely high standard of execution beyond just price – including consistently low rejection rates, low latency, minimum quote sizes and high fill ratios even during market events.

We have made our execution study public in the UK which can be viewed here and is a transparent comparison of FXCM's actual execution vs top tier futures brokers and the interbank market.
 

4evermaat

2nd Lieutenant
Messages
1,950
THESES m F I was winning against them every day ....and THEY SENT ME A LETTER : we can no longer have a relationship with you ......FOR COMPLIANCE REASON!!!!

NOW I SEE what they were doing

Can you post a screenshot or a photo of this letter? You can black out your name and sensitive info.
 

4evermaat

2nd Lieutenant
Messages
1,950
......

I can also discuss with you FXCM's execution practices outside of the US. FXCM uses 16 liquidity providers to create a best bid best offer price stream for clients. LPs selected to price retail clients are forced to adhere to an extremely high standard of execution beyond just price – including consistently low rejection rates, low latency, minimum quote sizes and high fill ratios even during market events.

We have made our execution study public in the UK which can be viewed here and is a transparent comparison of FXCM's actual execution vs top tier futures brokers and the interbank market.

:D:rolleyes::D:rolleyes::D:rolleyes::D:rolleyes::D:rolleyes::D:rolleyes: Seriously FXCM?

- Is fxcm fully prepared to offer trade receipts for clients for all trade activity for the previous 2 weeks showing roundtrip travel history with millisecond (or microsecond) timestamps? Can you provide an example of what such a trade receipt would look like?

- Didn't the full CFTC report conclude that your own secret LP [HF Trader] got a disproportionate amount of the order flow? Can FXCM even prove that they did (or currently do with worldwide entities) provide flow to those 16 independent LPs?

- Didn't you [Jason Rogers] try to deny the secret LP relationship when it was mentioned in Forex Factory thread? Link to post http://www.forexfactory.com/showthread.php?p=6085060#post6085060

- what about other past unfair practices like Asymmetric slippage? Particularly when it came around to reimbursing clients for getting ripped off. The original question and the next few posts after that: http://www.forexfactory.com/showthread.php?p=4868637#post4868637 Posts #2053 - #2066

You know what really pisses me off here. Not the fact that FXCM blatantly lied about their conflict of interest. Not that FXCM screwed over their shareholders that stuck with FXCM with all the previous bullsh*te. At least own it.

I have no problems with legitimate market making.....I do have a problem with this. Now does that mean that other brokers are not doing the same thing (lying about their conflict of interest, secretly warehousing trades, etc)? Of course they are. It doesn't make it right, that is my point. And traders have a right to be able to identify conflicts of interests so they can manage them properly.

FXCM rather arrogantly assumes that traders/regulators from non-US jurisdictions do not use google or keep up with the news. I wouldn't be surprised if UK, Au, etc didn't launch their own investigations or even possibly update their laws to allow traders more access to post-trade reporting (transparency). Civil class action lawsuit is not out of the question either in the USA. I'm sure you've pissed off a lot of people.
 

Attachments

  • enfforexcapitalorder020617.pdf
    871.1 KB · Views: 4

mbreitfelder

1st Lieutenant
Messages
622
Whatever happened to the idea of sending lawyers who write this stuff to English school to learn common sense language.
Alas whilst the CFTC slap FXCM, the individuals affected still remain losers in all this and only the CFTC win $7000,000.

I wholeheartedly agree with this, the CFTC is just taking the scammed money for themselves and doing nothing for the defrauded individuals. Hopefully there is an order being drafted for them to disgorge their ill gotten gains.
 

Pharaoh

Colonel
Messages
19,957
Although I applaud FXCM's actions around the SNB crisis, especially protecting clients from negative balances, this in no way excuses the company from secretly having its own private LP and lying to the NFA about it.

This sort of unethical (and in the USA, illegal) behavior is another reason I believe all brokers should be required to publicly disclose all LPs. As far as I am concerned, any broker refusing to do this probably doesn't have LPs or else may be running its own private LP.
 

Shedrack Amobi

Recruit
Messages
1
Fantastic stuff ... these crooks call themselves Forex Brokers in order to steal had earned cash from retail Forex traders like you and me. Thanks to CFTC at least we now know that FXCM is one of many crooks out there. Fantastic stuff indeed !!!
 

Texguy

Recruit
Messages
1
gee i was looking having a live trading account with fxcm, from what i have just red i am glad i didn't go through with it
They were a scam all along. I would fing "ghost" trades on my acct that I didn't create and when I would close out a pair, they would close out another pair from a different currency LOL! They must not have liked me winning too much. A different broker has been good though the last few years.
 

Jason Rogers

FXCM Representative
Messages
511
FXCM Discusses Impact of U.S. Exit

NEW YORK, Feb. 12, 2017 (GLOBE NEWSWIRE) -- FXCM Inc. (NASDAQ:FXCM) ("FXCM" or the "Company") today provided additional information regarding the costs associated with its U.S. retail foreign exchange activities, which it has agreed to sell to GAIN Capital Holdings, Inc. ("GAIN"). None of FXCM's costs will be transferring to GAIN and FXCM expects significant cost savings from the wind down of its U.S. retail foreign exchange operations.

The table below provides information on net revenues, net income, and Adjusted EBITDA* for FXCM's U.S. subsidiary, Forex Capital Markets LLC, and the rest of its continuing operations for the nine months ended September 30, 2016 (unaudited):




Even without its U.S. customers, FXCM remains one of the largest global retail foreign exchange brokers, and FXCM anticipates that the increased focus on serving its international global customer base will drive growth and continued profitability improvement.

* Adjusted EBITDA is a non-GAAP measure that is not prepared under any comprehensive set of accounting rules or principles and does not reflect all of the amounts associated with the Company's results of operations as determined in accordance with U.S. GAAP. The Company believes this non-GAAP measure, when presented in conjunction with the comparable U.S. GAAP measure, is useful to investors in better understanding its financial performance as seen through the eyes of management and facilitates comparisons of historical operating trends across several periods. The Company believes that investors use Adjusted EBITDA as a supplemental measure to evaluate the overall operating performance of companies in its industry that present similar measures, although the methods used by other companies in calculating Adjusted EBITDA may differ from the Company's method, even if similar terms are used to identify such measure. Adjusted EBITDA provides the Company with an understanding of the results from the primary operations of its business by excluding the effects of certain gains, losses or other charges that do not reflect the normal earnings of its core operations or that may not be indicative of its future outlook and prospects. Adjusted EBITDA does not represent and should not be considered as a substitute for net income or net income attributable to FXCM Inc., each as determined in accordance with U.S. GAAP. Please refer to the following table for a reconciliation of Adjusted EBITDA to net income.




(1) Represents a $0.1 million charge for tax receivable agreement payments.

(2) Represents the provision for debt forgiveness of $8.2 million against the notes receivable from the non-controlling members of Lucid, $5.4 million of professional fees, including fees related to the Leucadia restructuring transaction, stockholder rights plan and investigations into historical trade execution practices, partially offset by $1.0 million of insurance recoveries to reimburse for costs incurred related to the January 15, 2015 SNB event and the cybersecurity incident.

(3) Represents the net bad debt recovery related to client debit balances associated with the January 15, 2015 SNB event.

(4) Represents $2.4 million of professional fees relating to investigations into historical trade execution practices partially offset by $0.4 million of insurance recoveries to reimburse for costs incurred related to the January 15, 2015 SNB event and the cybersecurity incident.

Disclosure Regarding Forward-Looking Statements

In addition to historical information, this release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and/or the Private Securities Litigation Reform Act of 1995, which reflect FXCM's current views with respect to, among other things, its operations and financial performance in the future. These forward-looking statements are not historical facts and are based on current expectations, estimates and projections about FXCM's industry, business plans, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, readers are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict including, without limitation, risks associated with FXCM's plans to shut down its US subsidiary and a potential sale of its US customer accounts, risks associated with FXCM's strategy to focus on its operations outside the United States, risks associated with the events that took place in the currency markets on January 15, 2015 and their impact on FXCM's capital structure, risks associated with FXCM's ability to recover all or a portion of any capital losses, risks relating to the ability of FXCM to satisfy the terms and conditions of or make payments pursuant to the terms of the finance agreements with Leucadia, as well as risks associated with FXCM's obligations under its other financing agreements, risks related to FXCM's dependence on FX market makers, market conditions, risks associated with FXCM's litigation with the National Futures Association and the Commodity Futures Trading Commission or any other potential litigation or regulatory inquiries to which FXCM may become subject, risks associated with potential reputational damage to FXCM resulting from FXCM's plans to shut down its US subsidiary, and those other risks described under "Risk Factors" in FXCM Inc.'s Annual Report on Form 10-K, FXCM Inc.'s latest Quarterly Report on Form 10-Q, and other reports or documents FXCM files with, or furnishes to, the SEC from time to time, which are accessible on the SEC website at sec.gov. This information should also be read in conjunction with FXCM's Consolidated Financial Statements and the Notes thereto contained in FXCM's Annual Report on Form 10-K, FXCM Inc.'s latest Quarterly Report on Form 10-Q, and in other reports or documents FXCM files with, or furnishes to, the SEC from time to time, which are accessible on the SEC website at sec.gov.

These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in our SEC filings. FXCM Inc. undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

About FXCM Inc.

FXCM Inc. (NASDAQ:FXCM) is a publicly traded company which owns 50.1% of FXCM Group, LLC (FXCM Group).

FXCM Group is a holding company of Forex Capital Markets LLC, (FXCM US), Forex Capital Markets Limited, inclusive of all EU branches (FXCM UK), FXCM Australia Pty. Limited, (FXCM AU), and all affiliates of aforementioned firms, or other firms under the FXCM group of companies [collectively "FXCM"]. FXCM Group is owned and operated by FXCM Inc. (NASDAQ:FXCM) and Leucadia National Corporation (NYSE:LUK). Leucadia National Corporation is a multi-billion dollar diversified holding company engaged through its consolidated subsidiaries in a variety of businesses.

FXCM is a leading provider of online foreign exchange (FX) trading, CFD trading, spread betting and related services. The company's mission is to provide global traders with access to the world's largest and most liquid market by offering innovative trading tools, hiring excellent trading educators, meeting strict financial standards and striving for the best online trading experience in the market. Clients have the advantage of mobile trading, one-click order execution and trading from real-time charts. In addition, FXCM offers educational courses on FX trading and provides trading tools proprietary data and premium resources. FXCM Pro provides retail brokers, small hedge funds and emerging market banks access to wholesale execution and liquidity, while providing high and medium frequency funds access to prime brokerage services via FXCM Prime.

Trading foreign exchange and CFDs on margin carries a high level of risk, which may result in losses that could exceed your deposits, therefore may not be suitable for all investors. Read full disclaimer.

Jaclyn Sales, 646-432-2463
Vice-President, Corporate Communications
jsales@fxcm.com
investorrelations@fxcm.com
 

ghelfu

Recruit
Messages
1
I have the same issue for my multiple account with them and they are also blocklisted in Singapore so. Extra careful guys!

THESES m F I was winning against them every day ....and THEY SENT ME A LETTER : we can no longer have a relationship with you ......FOR COMPLIANCE REASON!!!!

NOW I SEE what they were doing
 

Joh

Sergeant Major
Messages
976
I have the same issue for my multiple account with them and they are also blocklisted in Singapore so. Extra careful guys!

They do not care, they r connected to other Companies by different names, they simply shuffle accounts. They are affiliated with IBFX as well (both USA) and IBFX sold (shuffled)their retail accounts to FXCM and they proceeded to slug the new customers for all sorts of reasons. Got lied to repeatedly - you cannot trust them -now they say 80% of their business is outside the USA it is possible - But once bitten twice shy be smart avoid them.
Do yourself a favour- do your research- check carefully here at FPA scams files- such as FXCM is the name you deal with but your statements come with a different name NOT FXCM .and you get swindled. All i can say i wish i had cut my losses earlier. my mistake!

Wishing you all the best!
.
 
Top