According to the law firm press release, FXCM provides online foreign exchange (“FX”) trading and related services to retail and institutional customers worldwide. The Company acts as an agent between retail customers and a collection of global banks and financial institutions by making foreign currency markets for customers trading in foreign exchange spot markets. FXCM provides its customers access to over-the-counter FX markets through its proprietary technology platform.
The complaint alleges that the Company issued materially false and/or misleading statements regarding the Company’s business operations and the strength of its financial prospects, while concealing significant weaknesses concerning its core business. According to the complaint, the truth was that: (1) the Company’s agency model did not insulate the Company from financial risk from its heavily leveraged clients; (2) the Company did not disclose the true potential risk posed by market volatility; (3) the Company did not maintain sufficient regulatory capital reserves; and (4) the Defendants’ positive statements about the Company’s business, operations, and growth lacked a reasonable basis.
Plaintiffs filed a consolidated complaint on January 12, 2016.
On August 18, 2016, the Court issued an Order granting Defendants' Motion to Dismiss. Plaintiffs were given leave to file an amended complaint. Plaintiffs did not file an amended complaint, this Judgment in favor of Defendants was entered on October 7. Plaintiffs filed a Notice of Appeal of this Order on November 3.
On August 17, 2017 the Court of Appeals issued a Mandate vacating the judgment of the District Court and remanding for further proceedings.
An amended Complaint was filed on August 25, 2017. Defendants filed a Motion to Dismiss the amended Complaint on September 28. On August 10, 2018, the Court issued an Order granting Defendants' Motion to Dismiss. On August 31, Plaintiffs filed a Notice appealing the Court's decision.