FXCM

Forex Capital Markets was founded in 1999 in New York, and was one of the early developers of and electronic trading platform for trading on the foreign exchange market. Initially, the firm was called Shalish Capital Markets, but after one year, rebranded as FXCM. In 2003, FXCM expanded overseas when it opened an office in London which became regulated by the UK Financial Services Authority.{{cite news|last1=Zian|first1=Mashit|title=FXCM Sells Forex News Website DailyFX.com for $40 Million|url=http://fxdailyreport.com/fxcm-sells-forex-news-website-dailyfx-com-40-million/|access-date=October 10, 2016|work=FXdailyReport.Com|date=October 2, 2015}}

In January 2003, FXCM entered into a partnership with Refco group, one of the largest US futures brokers at the time. Refco took a 35% stake in FXCM and licensed the FXCM software for use by its own clients. Refco filed for bankruptcy on October 17, 2005, a week after a $430 million fraud was discovered, and two months after its initial public offering. Refco's CEO Phillip R. Bennett was later convicted of the fraud.{{cite news|url=https://www.nytimes.com/2008/07/04/business/04refco.html|title=Ex-Refco Chief Sentenced to 16 Years in Cover-Up| newspaper=The New York Times | agency=Associated Press |issn=0362-4331 | date=July 4, 2008 | url-access=subscription}}

In November 2005, Refco agreed, in part, to sell its 35% stake back (which included 15,000 customer accounts) to FXCM for $110 million.{{cite news | last1=Politi | first1=James | last2=Simonian | first2=Haig | title=Refco agrees to sell part of forex brokerage | work=Financial Times | url =https://www.ft.com/content/e2fc58d2-52fd-11da-8d05-0000779e2340 | date=November 11, 2005}} In March 2006, however, Refco's creditors disallowed the deal and, later, denied a separate $130 million bid by FXCM.{{cite news | last=McMahon| first=Chris| title =Refco FX clients left with little in account| publisher =Futures| date =January 31, 2007 | url =http://www.futuresmag.com/2007/01/31/refco-fx-clients-left-little-account| access-date =May 21, 2018}} Refco's stake in FXCM was eventually sold to a consortium of buyers, including Lehman Brothers Holdings.{{cite news | last=Farrell| first=Maureen| title =A Brief History of FXCM| newspaper =The Wall Street Journal| date =January 16, 2015 | url =https://blogs.wsj.com/moneybeat/2015/01/16/a-brief-history-of-fxcm/| access-date =May 21, 2018}}

In May 2010, FXCM, Inc. purchased the UK-based, ODL Group. FXCM had previously acquired ODL's U.S. business in January 2009. The 2010 acquisition made FXCM the largest retail forex broker in the world with over 200,000 clients and assets of around $800 million.{{cite news | last=Wilson | first=Harry | title =Forex broker ODL accepts US takeover | work=The Daily Telegraph | date=May 4, 2010 | url=https://www.telegraph.co.uk/finance/newsbysector/banksandfinance/7678650/Forex-broker-ODL-accepts-US-takeover.html| access-date =May 21, 2018}}{{cite news | last=Greenberg| first=Michael| title =FXCM acquires ODL Group to form world's largest Forex broker (Updated)| publisher =Finance Magnates | url=https://www.financemagnates.com/forex/brokers/fxcm-acquires-odl-group-to-form-worlds-largest-forex-broker/ | date=May 4, 2010}}

In December 2010, FXCM completed an initial public offering and began trading on the New York Stock Exchange under the ticker symbol, FXCM. Share prices started at $14 with 15,060,000 shares for a total share capital of $211 million.{{cite news | last=Cowan| first=Lynn| title =Online Currency Broker Closes Up 6% in Debut| newspaper =The Wall Street Journal| date =December 3, 2010 | url =https://www.wsj.com/articles/SB10001424052748703377504575651160276956660| access-date =May 21, 2018}}{{cite web | last=Crum| first=Rex| title =FXCM rises 7% following IPO | website =MarketWatch| date =December 2, 2010 | url =https://www.marketwatch.com/story/fxcm-rises-7-following-ipo-2010-12-02| access-date =May 21, 2018}}{{cite news | last=Greenberg| first=Michael| title =FXCM successfully completes IPO, final value $1.05 billion| publisher =Finance Magnates| date =December 2, 2010 | url=https://www.financemagnates.com/forex/brokers/fxcm-sucessfully-completes-ipo-final-value-1-05-billion/| access-date =May 21, 2018}} In its IPO prospectus, FXCM described its no dealing desk trade execution.

{{Quote|When our customer executes a trade on the best price quotation offered by our FX market makers, we act as a credit intermediary, or riskless principal, simultaneously entering into offsetting trades with both the customer and the FX market maker. We earn fees by adding a markup to the price provided by the FX market makers and generate our trading revenues based on the volume of transactions, not trading profits or losses.{{cite web|title=Initial Public Offering, FXCM Inc., Class A Common Stock|url=https://www.sec.gov/Archives/edgar/data/1499912/000095012310110764/y87330b4e424b4.htm#112|website=SEC.gov|publisher=Securities and Exchange Commission|access-date=May 8, 2017|date=December 1, 2010}}}}

In August 2011, the National Futures Association (NFA) issued a $2-million fine to FXCM for slippage malpractice. All clients affected by price slippage were compensated within 30 days as part of the terms of the NFA deal.{{cite news | last=Greenberg| first=Michael| title =NFA fines FXCM $2 million for slippage malpractices, FXCM will credit clients back| publisher =Finance Magnates| date =August 13, 2018 | url =https://www.financemagnates.com/forex/brokers/nfa-fines-fxcm-2-million-for-slippage-malpractices-fxcm-will-credit-clients-back/| access-date =May 21, 2018}}{{cite news | title =NFA levies $2,000,000 monetary sanction against FXCM and orders refunds to customers | publisher =National Futures Association| date =August 12, 2011 | url=https://www.nfa.futures.org/news/newsRel.asp?ArticleID=3851| access-date =May 21, 2018}} In October of that year, the Commodity Futures Trading Commission (CFTC) ordered FXCM to pay $14.2 million in restitution to clients who had not been awarded positive slippage gains.{{cite news | last=Gallu| first=Joshua| title =FXCM Agrees to Pay $14 Million to Resolve CFTC 'Slippage' Claims| publisher =Bloomberg| date =October 3, 2011 | url =https://www.bloomberg.com/news/articles/2011-10-03/fxcm-agrees-to-pay-14-million-to-resolve-cftc-slippage-claims| access-date =May 21, 2018}}{{cite news | last=Kilgore | first=Tomi| title=FXCM's stock plunge to record low highlights risks to retail currency investors | work=MarketWatch | url=https://www.marketwatch.com/story/fxcms-stock-plunge-to-record-low-highlights-risks-to-retail-currency-investors-2017-02-07 | date=February 8, 2017}} The following year, in February and March 2011, several class actions lawsuits were filed against FXCM, alleging fraud and racketeering from deceptive and unfair trade practices, and misleading shareholders during the 2010 IPO.{{cite news | url=http://www.thestreet.com/story/11003116/1/morgan-business-trial-group-files-class-action-lawsuit-against-nations-largest-forex-dealer--fxcm.html | title=Morgan Business Trial Group Files Class Action Lawsuit Against Nation's Largest Forex Dealer – FXCM | date=February 10, 2011 | access-date=February 10, 2011 | archive-date=February 18, 2011 | archive-url=https://web.archive.org/web/20110218194328/http://www.thestreet.com/story/11003116/1/morgan-business-trial-group-files-class-action-lawsuit-against-nations-largest-forex-dealer--fxcm.html | url-status=dead }}{{cite news |url=http://www.thestreet.com/story/11013461/1/kahn-swick-amp-foti-llc-and-former-louisiana-attorney-general-announce-investigation-into-fxcm-inc-8211-fxcm.html |title=Kahn Swick & Foti, LLC And Former Louisiana Attorney General Announce Investigation Into FXCM, Inc. – FXCM |date=February 16, 2011 |access-date=February 18, 2011 |archive-date=February 21, 2011 |archive-url=https://web.archive.org/web/20110221211925/http://www.thestreet.com/story/11013461/1/kahn-swick-amp-foti-llc-and-former-louisiana-attorney-general-announce-investigation-into-fxcm-inc-8211-fxcm.html |url-status=dead }}{{cite press release | url=https://www.businesswire.com/news/home/20110217007153/en/Law-Offices-Howard-G.-Smith-Announces-Investigation | title=Law Offices of Howard G. Smith Announces Investigation On Behalf of Investors of FXCM Inc. | date=February 17, 2011}} From 2005-January 2017, FXCM faced a total of 13 CFTC reparations cases, 17 NFA arbitration decisions, and 8 other regulatory actions in the U.S.{{cite news|last1=Kilgore|first1=Tomi|title=FXCM's stock plunge to record low highlights risks to retail currency investors |url=https://www.marketwatch.com/story/fxcms-stock-plunge-to-record-low-highlights-risks-to-retail-currency-investors-2017-02-07 | work=MarketWatch | publisher=Dow Jones|date=February 8, 2017}}

In June 2012, FXCM purchased a controlling stake in Lucid Markets for $176 million net of Lucid cash. Lucid Markets, a London-based automated trading group was at that time recognized as one of the largest FX traders in the world with FX volumes rivaling that of large investment banks. FXCM also entered into a deal with Credit Suisse to develop the FastMatch electronic communication network (ECN).{{cite news | last=Englander| first=David| title =A Fast-Growing Money Machine| newspaper =Barron's| date =November 10, 2012 | url =https://www.barrons.com/articles/SB50001424052748703728004578104931532108200| access-date =May 21, 2018}}{{cite news | last=Szalay| first=Eva| title =FXCM grabs 50% controlling stake in Lucid Markets | work=MarketWatch | url=https://www.marketwatch.com/story/fxcm-grabs-50-controlling-stake-in-lucid-markets-2012-06-14 | date=June 14, 2012}}{{cite news | last=Greenberg | first=Michael| title =Credit Suisse teams up with FXCM in launching FastMatch the new ECN forex platform | publisher=Finance Magnates| date =June 19, 2012 | url =https://www.financemagnates.com/forex/brokers/credit-suisse-teams-up-with-fxcm-in-launching-fastmatch-the-new-ecn-forex-platform/| access-date =May 21, 2018}} In 2013, FXCM bought a $12-million note issued by Infinium Capital Management, a high-speed trader based in Chicago.{{cite news | last=Polansek| first=Tom | title=Struggling Infinium Capital negotiates to sell assets to FXCM | work=Reuters | url=https://www.reuters.com/article/us-infinium-fxcm-assets/struggling-infinium-capital-negotiates-to-sell-assets-to-fxcm-idUSBREA081J020140109 | date=January 9, 2014}} FXCM later purchased five trading desks and some physical assets from Infinium in March 2014.{{cite news | title =High-speed trader Infinium stops trading, winds down| newspaper =Chicago Tribune| date = March 6, 2014| url =https://www.chicagotribune.com/2014/03/06/high-speed-trader-infinium-stops-trading-winds-down/| access-date =May 21, 2018}}

In February 2014 the UK Financial Conduct Authority (FCA) fined FXCM and FXCM Securities Ltd ("FXCM UK") £4 million for slippage violations and for failing to inform the FCA of the CFTC investigation of the same practices. About £6 million was also paid in restitution to FXCM UK’s clients for a total of £10 million ($16.9 million) in fines.{{cite news | last1=Schäfer| first1=Daniel|last2=Stafford | first2=Philip | title =Regulator penalises US forex trading group FXCM twice | work=Financial Times | date =February 26, 2014 | url =https://www.ft.com/content/1b5dcd8c-9ee5-11e3-8663-00144feab7de | access-date =May 21, 2018}}{{cite news | last=Finberg | first=Ron | title =FXCM UK Announces $16.9 Million Settlement with FCA for Asymmetric Slippage| publisher=Finance Magnates| date = February 26, 2014| url=https://www.financemagnates.com/forex/brokers/fxcm-uk-announces-16-9-million-settlement-with-fca-for-asymmetric-slippage/ | access-date =May 21, 2018}}

On January 15, 2015 following a large increase in the price of Swiss francs, FXCM lost $225 million and was in breach of regulatory capital requirements.{{cite news | last=Schaefer| first=Steve| title =Swiss Franc Stunner Claims Victims, Currency Broker FXCM Bludgeoned| work=Forbes | url=https://www.forbes.com/sites/steveschaefer/2015/01/16/swiss-bank-stunner-claims-victims-currency-broker-fxcm-bludgeoned/ | date=January 16, 2015}} The following day, the company received a $300-million bailout loan with a 10% interest rate from Leucadia in order to meet its capital requirements. Details of the deal showed that the interest rate could go as high as 17%.{{cite news | last1=Demos | first1=Telis | last2=Rexrode | first2=Christina | title =FXCM to Get $300 Million Rescue Package From Jefferies| work=The Wall Street Journal | url =https://www.wsj.com/articles/fxcm-in-talks-for-rescue-package-from-jefferies-1421431006| date=January 16, 2015 | url-access=subscription}}{{cite web | title =FXCM rescue package includes rising interest rate | website =MarketWatch| date =January 20, 2015 | url =https://www.marketwatch.com/story/fxcm-rescue-package-includes-rising-interest-rate-2015-01-20-8103622| access-date =May 21, 2018}} Later in January, FXCM announced that it would be forgiving 90% of its accounts that incurred negative balances as a result of the unexpected Swiss franc price movement.{{cite web | last=Udland| first=Myles| title =Currency Broker FXCM Is Bailing Out Mom And Pop| website =Business Insider| date =January 28, 2015 | url =http://www.businessinsider.com/fxcm-forgiving-swiss-franc-losses-2015-1| access-date =May 21, 2018}}{{cite news | last=Caronna| first=Michael| title =FXCM to 'forgive' most clients for negative balances on Swiss franc move| publisher =CNBC| date =January 28, 2015 | url =https://www.cnbc.com/2015/01/28/fxcm-to-forgive-most-clients-for-negative-balances-on-swiss-franc-move.html| access-date =May 21, 2018}} In September 2016, Leucadia extended the original two-year loan by one year.{{cite news | last=Jamerson | first=Joshua | title=FXCM, Leucadia Amend Terms of Rescue Package | work=The Wall Street Journal | url=https://www.wsj.com/articles/fxcm-leucadia-amend-terms-of-rescue-package-1472736387 | date=September 1, 2016 | url-access=subscription}}

In February 2017, the CFTC fined FXCM, Inc. and three founding partners (including Drew Niv) $7 million for engaging in fraudulent activities. The CFTC found that the company's "no dealing desk" model (known as a direct market access system) routed trades through a market maker, Effex Capital, that was allegedly supported and controlled by FXCM. FXCM was then barred by the CFTC and the NFA as were the three founding partners. In response, FXCM, Inc. changed its name to Global Brokerage, Inc. and named Brendan Callan the interim CEO, replacing Drew Niv. The company also named Jimmy Hallac, a managing director at Leucadia, the chairman.{{cite magazine | last=Green| first=Robert A.| title =Learn Why The NFA Barred FXCM And What It Means For Forex Traders| magazine =Forbes| date =March 1, 2017 | url =https://www.forbes.com/sites/greatspeculations/2017/03/01/learn-why-the-nfa-barred-fxcm-and-what-it-means-for-forex-traders/#ed51c3f177c2| access-date =May 21, 2018}}{{cite web | last=Goldstein| first=Steve| title =FXCM banned by CFTC after taking positions against clients | website =MarketWatch| date =February 6, 2017 | url =https://www.marketwatch.com/story/fxcm-banned-by-cftc-after-taking-positions-against-clients-2017-02-06| access-date =May 21, 2018}} All 40,000 of FXCM's U.S. accounts were sold to Gain Capital.

Global Brokerage, Inc. remained listed on NASDAQ under the ticker symbol, "GLBR." In May 2017, Global Brokerage was notified by NASDAQ that the market value of its stocks were not sufficient for continued listing.{{cite news | last=Nikolova| first=Maria| title =FXCM (Global Brokerage) runs into trouble with NASDAQ listing| publisher =Finance Feeds| date =May 8, 2017 | url =https://financefeeds.com/fxcm-global-brokerage-runs-trouble-nasdaq-listing/| access-date =May 21, 2018}} In August of that year, FXCM sold its stake in the FastMatch ECN for $46.7 million and used that money to repay part of the Leucadia loan. At that point, FXCM still owed $66.8 million on the loan.{{cite news | last=Patterson| first=Jeff| title =FXCM Closes FastMatch Sale, $66.8m Still Owed to Leucadia| publisher =Finance Magnates| date =August 14, 2017 | url =https://www.financemagnates.com/forex/brokers/fxcm-closes-fastmatch-sale-66-8m-still-owed-leucadia/| access-date =May 21, 2018}} In October 2017, the FXCM Group terminated a management agreement with Global Brokerage. The following month, FXCM clarified that, while Global Brokerage held a 50.1% equity interest in the company, it held a minority economic interest. Leucadia owned a 49.9% equity share with a 65% economic interest.{{cite news | last=Abdel-Qader| first=Aziz| title =Global Brokerage Applies for Voluntary Delisting from Nasdaq Exchange| publisher =Finance Magnates| date =December 8, 2017 | url=https://www.financemagnates.com/forex/brokers/global-brokerage-%E2%80%8Efinally-delists-common-shares-nasdaq-exchange/| access-date =May 21, 2018}}

Global Brokerage, Inc. filed for Chapter 11 bankruptcy in November 2017 and was delisted from NASDAQ in December 2017.{{cite news | title =BRIEF-Global Brokerage, Inc. Receives Approximately 78.5% Yes Votes To Move Forward With The Prepackaged Plan Of Reorganization| work =Reuters| date =December 11, 2017 | url =https://www.reuters.com/article/brief-global-brokerage-inc-receives-appr/brief-global-brokerage-inc-receives-approximately-78-5-yes-votes-to-move-forward-with-the-prepackaged-plan-of-reorganization-idUSASB0BXH1| access-date =May 21, 2018}}{{cite news | last=Golovtchenko| first=Victor| title =Breaking: Global Brokerage Files for Bankruptcy, NASDAQ Delisting Pending| publisher =Finance Magnates| date =November 11, 2017 | url =https://www.financemagnates.com/forex/brokers/breaking-global-brokerage-files-bankruptcy-nasdaq-delisting-pending/| access-date =May 21, 2018}} Global Brokerage later reorganized out of bankruptcy in February 2018. At that time, however, Global Brokerage's real economic interest in the FXCM Group was between 10 and 50% depending on the amount of distributions FXCM makes. Also in February 2018, FXCM rebranded itself as "FXCM: A Leucadia Company".{{cite news | title =Exclusive: FXCM rebrands, adds 'Leucadia' into its logo| publisher =LeapRate| date =February 21, 2018 | url =https://www.leaprate.com/forex/brokers/fxcm-rebrand-leucadia-logo/| access-date =May 21, 2018}} As of March 2018, FXCM remained the second-largest retail forex broker outside of Japan.{{cite news | last=Majewski| first=Sylwester| title =Analysis: FXCM Remains in the Top 5 in 2017| publisher =Finance Magnates| date =March 14, 2018 | url =https://www.financemagnates.com/forex/analysis/forexanalysisanalysis-fxcm-remains-top-5-2017/| access-date =May 21, 2018}}

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Category:Financial services companies established in 1999

Category:Financial services companies of the United States

Category:Financial derivative trading companies

Category:Foreign exchange companies

Category:2010 initial public offerings

Category:1999 establishments in New York (state)