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			{{Short description\|Online Foreign exchange market broker based in the United States}}
			{{pp-semi-protected\|small=yes}}
			{{Use mdy dates\|date=January 2019}}
	{{Infobox company		{{Infobox company
	\| name = FXCM ~~Inc.~~		\| name = FXCM
	\|logo = FXCM ~~Logo Blue Text White Background~~.~~gif~~		\|logo = FXCM logo.svg
	\| type = ]		\| type = ]
	\| traded_as = {{NASDAQ\|~~GLBR~~}}		\| traded_as = {{NASDAQ was\|FXCM}}
	\| founder =		\| founder = Drew Niv
			\| key_people = Brendan Callan, CEO<ref>{{cite web\|title=FXCM Group Elevates Brendan Callan to CEO Following Successful Interim Stint\|url=https://www.financemagnates.com/executives/moves/fxcm-group-elevates-brendan-callan-ceo-following-successful-interim-stint/\|website=Finance Magnates\|publisher=Finance Magnates}}</ref>
	\| key_people = Drew Niv, former CEO and Co-founder
	\| industry = ]		\| industry = ]
	\| services = ], ]		\| services = ]<BR/>]
	\| revenue =		\| revenue =
	\| operating_income =		\| operating_income =
	\| net_income =		\| net_income =
	\| assets =		\| assets =
			\| num_employees =
	\| num_employees = 804<ref>{{cite web\| url=https://www.sec.gov/Archives/edgar/data/1499912/000149991216000015/fxcm-20151231x10k.htm \|title=FXCM Inc. Prospectus \|publisher=FXCM \|accessdate=December 31, 2015}} (2015)</ref>
	\| ~~foundation~~ = ~~{{Start~~ ~~date\|1999}}~~		\| parent = ]
	\| ~~location_city~~ = ]		\| foundation = {{Start date and age\|1999}}
			\| location_city =
	\| location_country = ]
			\| location_country =
	\| website = hide
	}}		}}

			'''FXCM''', also known as '''Forex Capital Markets''', is a ] ] for trading on the ]. FXCM allows people to speculate on the foreign exchange market and provides trading in ] (CFDs) on major ] and commodities such as ] and ]. It is based in ].
	'''Forex Capital Markets''', better known as '''FXCM''', is an online ] broker with headquarters in the ] and offices in the United Kingdom, Germany, France and Australia<ref>{{cite web\|title=FXCM Offices\|url=https://www.fxcm.com/uk/why-fxcm/international-sites-offices/\|website=FXCM\|publisher=FXCM}}</ref>. On February 6, 2017 the firm agreed to pay a $7 million penalty to settle a suit from the ] (CFTC), withdraw its CFTC registration, and agree not to re-register in the future, effectively banning it from trading in the United States.<ref name="Law360">{{cite web\|last1=Atkins\|first1=Dorothy\|title=FXCM To Pay $7 M For Hiding Deal With Market Maker\|url=https://www.law360.com/articles/889101/fxcm-to-pay-7m-for-hiding-deal-with-market-maker\|website=]\|publisher=]\|accessdate=February 23, 2017\|date=February 6, 2017}}</ref> Three top managers have resigned under regulatory pressure and the firm has changed its name to Global Brokerage Inc., effective January 27, 2017.<ref name="Roy">{{cite news\|last1=Chavez-Dreyfuss\|first1=Gertrude\|title=FXCM changes company name; appoints interim CEO\|url=http://finance.yahoo.com/news/fxcm-changes-company-name-appoints-172926956.html\|accessdate=February 24, 2017\|agency=Reuters\|publisher=Yahoo Finance\|date=February 21, 2017}}</ref><ref name="bloom022417">{{cite news\|last1=Nguyen\|first1=Lananh\|title=Gain Capital Is Set to Become the Biggest U.S. Retail FX Provider\|url=https://www.bloomberg.com/news/articles/2017-02-24/gain-capital-to-take-top-slot-in-u-s-retail-fx-as-fxcm-exits\|accessdate=February 26, 2017\|agency=Bloomberg\|date=February 24, 2017}}</ref>

			The company was banned from ] markets for defrauding its customers.<ref name="KMFT2717">{{cite news \| last1=Martin \| first1=Katie \| title=US regulators slap down FXCM for trading against own clients \| url=https://www.ft.com/content/7f5120ca-ef03-374b-99d3-4dbbb655eda2 \| work=] \| date=February 7, 2017}}</ref><ref name="runfromLondon">{{cite news \| title=Exclusive: FXCM UK does not expect market maker repercussions like in the US \| url=https://www.leaprate.com/forex/brokers/exclusive-fxcm-uk-not-expect-market-maker-repercussions-like-us/ \|access-date=May 18, 2017\|publisher=LeapRate\|date=May 18, 2017}}</ref> Its former parent company, '''Global Brokerage, Inc.''' filed for bankruptcy on December 11, 2017.<ref name="FFbankruptcy">{{cite web\|last1=Nikolova\|first1=Maria\|title=Global Brokerage expects to commence Chapter 11 bankruptcy case by December 20, 2017\|url=https://financefeeds.com/global-brokerage-expects-commence-chapter-11-bankruptcy-case-december-20-2017/\|website=Finance Feeds\|access-date=November 21, 2017\|date=November 14, 2017}}</ref> The operating company, known as FXCM Group, is now owned by ], which changed its name from Leucadia National Corporation in 2018.<ref name="Leu2Jeff">{{cite news\|title=Leucadia to shed most non-financial assets, rename as 'Jefferies' \| url=https://www.reuters.com/article/us-leucadia-natl-restructuring/leucadia-to-shed-most-non-financial-assets-rename-as-jefferies-idUSKBN1HG1N3 \| work=] \| date=April 9, 2018}}</ref> Global Brokerage shareholders lost over 98% of their investment since January 2015.<ref name="splits">{{cite web\|title=FXCM Split History\|url=https://www.splithistory.com/fxcm/\|website=Split History.com\|access-date=May 25, 2017}}</ref>
	An employee of ], which holds a major equity stake in the company, has been appointed chairman of the FXCM board. The staff of FXCM's London operation have been told to seek other employment, according to unnamed sources cited by Reuters,<ref name="Roy"/> though, as of February 24, 2017, the firm appears to be still trading in the United Kingdom, Europe, and Australia.<ref name="bloom022417"/>

			On February 6, 2017, the firm agreed to pay a $7 million penalty to settle a suit from the ] (CFTC) involving fraudulent misrepresentation by FXCM to its customers and to regulators. FXCM withdrew its CFTC registration and agreed not to re-register in the future, effectively banning it from trading in the United States.<ref name="Law360">{{cite web\|last1=Atkins\|first1=Dorothy\|title=FXCM To Pay $7 M For Hiding Deal With Market Maker\|url=https://www.law360.com/articles/889101/fxcm-to-pay-7m-for-hiding-deal-with-market-maker\|website=]\|publisher=]\|access-date=February 23, 2017\|date=February 6, 2017}}</ref> Three top managers resigned under regulatory pressure and the majority owner of the firm changed its name to Global Brokerage Inc., effective January 27, 2017.<ref name="Roy">{{cite news \| last=Chavez-Dreyfuss \| first=Gertrude \| title=FXCM changes company name; appoints interim CEO \| url=https://www.reuters.com/article/fxcm-forex/fxcm-changes-company-name-appoints-interim-ceo-idUSL1N1G60YY \| work=] \| date=February 21, 2017}}</ref><ref name="bloom022417">{{cite news\|last1=Nguyen\|first1=Lananh\|title=Gain Capital Is Set to Become the Biggest U.S. Retail FX Provider\|url=https://www.bloomberg.com/news/articles/2017-02-24/gain-capital-to-take-top-slot-in-u-s-retail-fx-as-fxcm-exits\|access-date=February 26, 2017\|agency=Bloomberg\|date=February 24, 2017}}</ref><ref>{{cite news \| first1=Ciara \| last1=Linnane \| title=FXCM names interim CEO, changes name to Global Brokerage \| url=https://www.marketwatch.com/story/fxcm-names-interim-ceo-changes-name-to-global-brokgerage-2017-02-21 \| date=February 21, 2017}}</ref><ref name="NFAbarring">{{cite web \|url=http://www.nfa.futures.org/news/newsRel.asp?ArticleID=4786 \|title=NFA bars New York retail foreign exchange dealer Forex Capital Markets, LLC and its principals Dror Niv, William Ahdout and Ornit Niv from membership \|date=February 6, 2017 \|access-date=February 7, 2017 \|publisher=NFA}}</ref>
	Its U.S. accounts are being sold to ]. About 40,000 customer accounts are expected to be sold at about $375 each.<ref name="bloom022417"/>

			Global Brokerage filed for bankruptcy in November 2017, but officially reorganized in February 2018. While the company technically owns a 51% equity stake in FXCM Group, its agreement with Leucadia (now Jefferies Financial Group) and FXCM about future distributions of cash flows places its real economic interest in FXCM at 10 to 50%. Jefferies Financial Group remains the de facto parent company of the FXCM Group.<ref name="LRRebrand"/><ref name="LRReorg">{{cite news \| title =Global Brokerage successfully exits bankruptcy, convertible notes replaced\| publisher =LeapRate\| date =February 9, 2018 \| url =https://www.leaprate.com/forex/brokers/global-brokerage-successfully-exits-bankruptcy-convertible-notes-replaced/\| access-date =May 21, 2018}}</ref>
	The company provided services through its own ] and through third party platforms such as ]. FXCM allowed retail and institutional clients to speculate on global foreign exchange markets in what is known as "margin forex trading". Outside the US, FXCM also provided trading in ] (CFDs) on major ] and commodities such as ] and ].

			A Managing Director of Jefferies Financial Group, which before the bankruptcy held a 49.9% equity stake in the operating company,<ref>{{cite news\|title=FXCM remains in the game with March volumes up 12% to $225 billion\|url=https://www.leaprate.com/forex/brokers/fxcm-remains-game-march-volumes-12-225-billion/\|access-date=April 16, 2017\|date=April 12, 2017}}</ref> was appointed chairman of the FXCM Group board.<ref>{{cite news\|title=Breaking: FXCM Group Promotes Brendan Callan to CEO Leucadia Appoints Chairman\|url=http://www.financemagnates.com/forex/brokers/breaking-fxcm-promotes-brendan-callan-ceo-leucadia-appoints-chairman/\|date=February 21, 2017\|access-date=April 16, 2017}}</ref> Its ]. accounts were sold to ]. About 40,000 customer accounts were sold at about $375 each.<ref name="bloom022417"/><ref>{{cite web \|url=https://financefeeds.com/gain-capital-puts-sum-paid-fxcm-us-client-accounts-7-2m-end-q32017/ \|title=GAIN Capital puts sum paid for FXCM US client accounts at $7.2m at end of Q3'2017 \|date=November 9, 2017 \|publisher=FinanceFeeds}}</ref>
	Following a large increase in the price of ]s on January 15, 2015, the company announced that it may be "in breach of some regulatory capital requirements."<ref name=swup>{{cite web\|title=FXCM Comments on Swiss Franc Movement\|url=http://money.cnn.com/news/newsfeeds/articles/globenewswire/10115820.htm\|website=GlobeNewswire\|publisher=CNN\|accessdate=16 January 2015}}</ref> On January 16, FXCM announced that it had secured a $300 million loan with a 10% coupon from ] in order to meet its capital requirements.<ref name=reuters>{{cite news\|last1=Stone\|first1=Mike\|last2=Chavez-Dryfuss\|first2=Gertrude\|last3=Toonkel\|first3=Jessica\|title=FX broker FXCM gets rescue from Jefferies parent Leucadia\|url=http://www.reuters.com/article/2015/01/16/us-swiss-snb-fxcm-idUSKBN0KP1MY20150116\|accessdate=16 January 2015\|agency=Reuters\|date=16 January 2015}}</ref> On January 20 further terms of the loan were released, showing that the coupon rate might rise to 17% and that asset sales and other limitations were imposed. ] analysts quoted by '']'' said that the terms of the loan “essentially wiped out” the value of FXCM’s stock.<ref name=bloomb>{{cite web\|last1=Faux\|first1=Zeke\|title=FXCM Owners Almost Wiped Out as Bailout Lets Leucadia Force Sale\|url=https://www.bloomberg.com/news/2015-01-20/fxcm-plunges-as-bailout-lets-leucadia-force-sale-of-brokerage.html\|publisher=Bloomberg\|accessdate=20 January 2015}}</ref><ref name=MWatch>{{cite news\|last1=Wall Street Journal Staff\|title=FXCM rescue package includes rising interest rate\|url=http://www.marketwatch.com/story/fxcm-rescue-package-includes-rising-interest-rate-2015-01-20-8103622\|accessdate=20 January 2015\|agency=Market Watch\|publisher=Staff\|date=20 January 2015}}</ref>

	==History==		==History==
			===1999–2008: Founding and Refco stake===
			Forex Capital Markets was founded in 1999 in ], and was one of the early developers of and ] for trading on the ]. 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 ].<ref>{{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}}</ref>

			In January 2003, FXCM entered into a partnership with ] 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 ]. Refco's CEO ] was later convicted of the fraud.<ref name="refcofraud">{{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=] \| agency=] \|issn=0362-4331 \| date=July 4, 2008 \| url-access=subscription}}</ref>
	=== Foundation ===
	Forex Capital Markets was founded in 1999 in New York, and was one of the early developers of online ]. In January 2003, FXCM entered into a partnership with ] 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. Following the collapse of ] in October 2005, FXCM became entrenched in the Refco bankruptcy proceedings for a number of years.

			In November 2005, Refco agreed, in part, to sell its 35% stake back (which included 15,000 customer accounts) to FXCM for $110 million.<ref name="FT05">{{cite news \| last1=Politi \| first1=James \| last2=Simonian \| first2=Haig \| title=Refco agrees to sell part of forex brokerage \| work=] \| url =https://www.ft.com/content/e2fc58d2-52fd-11da-8d05-0000779e2340 \| date=November 11, 2005}}</ref> In March 2006, however, Refco's creditors disallowed the deal and, later, denied a separate $130 million bid by FXCM.<ref name="Futures">{{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}}</ref> Refco's stake in FXCM was eventually sold to a consortium of buyers, including ].<ref name="WSJHistory">{{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}}</ref>
	In 2003, FXCM expanded overseas when it opened an office in London which became regulated by the UK ].<ref>{{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/\|accessdate=10 October 2016\|work=FXdailyReport.Com\|date=2 October 2015}}</ref>

			===2009–2014: Legal issues and initial public offering===
	In 2008, the self-regulatory organization for the US futures industry, the ] (NFA), obtained permission from the ] (CFTC) to increase the minimum capital requirements, in staged increments, to $20M for "Forex Dealer Members" including FXCM. The increase was in response to the failures of a few forex brokers, and it allowed FXCM to acquire new business from some of its smaller competitors who either ceased all operations or moved out of the US.<ref>{{cite web
			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.<ref name="TeleODL">{{cite news \| last=Wilson \| first=Harry \| title =Forex broker ODL accepts US takeover \| work=] \| 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}}</ref><ref name="FMODL">{{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}}</ref>
	\|url=http://www.nfa.futures.org/news/newsNotice.asp?ArticleID=2198
	\|title=Net Capital Requirements for Forex Dealer Members
	\|publisher=NFA
	\|date=September 24, 2008
	\|accessdate=July 28, 2010
	}}</ref><ref>{{cite web\|
	url=http://mediaserver.fxstreet.com/Reports/e14295c4-8509-4ad0-88b5-ee4b026a9442/761e4cac-f3a1-4299-b73b-eb6ff05ae441.pdf
	\|title=NFA proposal could cause significant shakeup among forex brokerages
	\|publisher=Currency Trader Magazine
	\|date = August 2007
	\|accessdate=July 28, 2010
	}}</ref> The same year it continued its overseas expansion and opened offices in France and Australia.

			In December 2010, FXCM completed an ] and began trading on the ] under the ticker symbol, FXCM. Share prices started at $14 with 15,060,000 shares for a total share capital of $211 million.<ref name="WSJIPO">{{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}}</ref><ref name="MWIPO">{{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}}</ref><ref name="FMIPO">{{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}}</ref> In its IPO ], FXCM described its no dealing desk trade execution.
	The following year FXCM UK started offering a limited number of ]s to its non-US based clients, in addition to its currency products. In May 2010, FXCM acquired the UK CFD and ] provider ODL.<ref>{{cite news
			{{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.<ref>{{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}}</ref>}}
	\|title=Forex broker ODL accepts US takeover
	\|author=Harry Wilson\|newspaper=telegraph.co.uk
	\|date=May 4, 2010
	\|url=http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/7678650/Forex-broker-ODL-accepts-US-takeover.html
	\|location=London
	}}</ref>

			In August 2011, the ] (NFA) issued a $2-million fine to FXCM for ] malpractice. All clients affected by price slippage were compensated within 30 days as part of the terms of the NFA deal.<ref name="FMSlip">{{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}}</ref><ref name="NFA2011">{{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}}</ref> 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.<ref name="Bloom2011">{{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}}</ref><ref name="MWAction">{{cite news \| last=Kilgore \| first=Tomi\| title=FXCM's stock plunge to record low highlights risks to retail currency investors \| work=] \| 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}}</ref> 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 ].<ref>{{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 }}</ref><ref>{{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 }}</ref><ref>{{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}}</ref> 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.<ref name="MWotherReg">{{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=] \| publisher=Dow Jones\|date=February 8, 2017}}</ref>
	=== Initial public offering, law suits, fines and expansion===
	In December 2010, FXCM went public and began trading on the ], becoming the first forex broker in the US to ]. The initial public offering price was 14.00 per share.<ref>{{cite news
	\|url=https://www.bloomberg.com/news/2010-12-01/fxcm-seeks-226-million-in-first-online-trading-ipo-since-2007.html
	\|title=FXCM’s IPO Raises $211 Million at Midpoint of Range
	\|publisher=]
	\|date=Dec 2, 2010
	\|accessdate=Dec 10, 2010
	\|first1=Cecile
	\|last1=Vannucci
	\|first2=Lee
	\|last2=Spears
	}}</ref><ref>{{cite web\|url=https://www.bloomberg.com/news/2010-12-01/fxcm-seeks-226-million-in-first-online-trading-ipo-since-2007.html \|title=FXCM's IPO Raises $211 Million at Midpoint of Range \|publisher=Bloomberg \|date=August 21, 2013}}</ref> The following year, in February and March 2011, a number of class actions lawsuits were filed against FXCM, alleging fraud and racketeering from deceptive and unfair trade practices, and misleading shareholders during the 2010 ].<ref>{{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=Feb 10, 2011
	}}</ref><ref>{{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=Feb 16, 2011
	}}</ref><ref>{{cite news
	\|url=http://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=Feb 17, 2011
	}}</ref>

			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 ] to develop the FastMatch ] (ECN).<ref name="BarronsFast">{{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}}</ref><ref name="MWLucid">{{cite news \| last=Szalay\| first=Eva\| title =FXCM grabs 50% controlling stake in Lucid Markets \| work=] \| url=https://www.marketwatch.com/story/fxcm-grabs-50-controlling-stake-in-lucid-markets-2012-06-14 \| date=June 14, 2012}}</ref><ref name="FMSuisse">{{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}}</ref> In 2013, FXCM bought a $12-million ] issued by Infinium Capital Management, a high-speed trader based in ].<ref name="ReutersStruggling">{{cite news \| last=Polansek\| first=Tom \| title=Struggling Infinium Capital negotiates to sell assets to FXCM \| work=] \| url=https://www.reuters.com/article/us-infinium-fxcm-assets/struggling-infinium-capital-negotiates-to-sell-assets-to-fxcm-idUSBREA081J020140109 \| date=January 9, 2014}}</ref> FXCM later purchased five trading desks and some physical assets from Infinium in March 2014.<ref name="Trib">{{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}}</ref>
	In August 2011, the NFA fined FXCM $2M for ] malpractices. FXCM reached settlements with the NFA and the CFTC of $2M and $6M respectively, for practices relating to failure to pass along positive slippage to customers on certain order types prior to August 2010. In conjunction with these settlements, FXCM provided clients with restitution for the total amount of positive slippage, approximately $8M.<ref>{{cite news
	\|url=http://ir.fxcm.com/phoenix.zhtml?c=238885&p=irol-newsArticle&ID=1612849&highlight=
	\|title= Investor Relations (Press Release)
	\|date=October 3, 2011
	}}</ref>

			In February 2014 the UK ] (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.<ref name="FT2014">{{cite news \| last1=Schäfer\| first1=Daniel\|last2=Stafford \| first2=Philip \| title =Regulator penalises US forex trading group FXCM twice \| work=] \| date =February 26, 2014 \| url =https://www.ft.com/content/1b5dcd8c-9ee5-11e3-8663-00144feab7de \| access-date =May 21, 2018}}</ref><ref name="FMFCA">{{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}}</ref>
	In October 2011, FXCM completed its acquisition of Japanese FX broker Foreland Forex Co., Ltd. for approximately $17M, net of cash and liquid assets acquired.<ref>{{cite news
	\|url=http://ir.fxcm.com/phoenix.zhtml?c=238885&p=irol-newsArticle&ID=1617184&highlight=
	\|title=Dismissal Granted in SNB Related Securities Class Action Lawsuit against FXCM Inc. and Certain Officers (Press Release)
	\|date=October 13, 2011
	}}</ref>

			===2015–2017: Swiss franc jump and U.S. license loss===
	On October 25, 2011, three debtors, Certified, Inc., Global Bullion Trading Group, Inc., and WJS Funding, Inc., filed an adversary complaint in the United States Bankruptcy Court for the Southern District of Florida against Forex Capital Markets LLC, ODL Securities, Inc., and ODL Securities, Ltd. (“Defendants”). The complaint asserts claims under the Federal Bankruptcy Code to recover allegedly preferential and fraudulent transfers to the Defendants, under the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C §1961 et seq., as well as the common law. The complaint seeks an unspecified amount of compensatory and punitive damages, interests, and costs.<ref>{{cite news
			On January 15, 2015 following a large increase in the price of ], FXCM lost $225 million and was in breach of regulatory capital requirements.<ref name="ForbesSwiss">{{cite news \| last=Schaefer\| first=Steve\| title =Swiss Franc Stunner Claims Victims, Currency Broker FXCM Bludgeoned\| work=] \| url=https://www.forbes.com/sites/steveschaefer/2015/01/16/swiss-bank-stunner-claims-victims-currency-broker-fxcm-bludgeoned/ \| date=January 16, 2015}}</ref> 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%.<ref name="WSJRescue">{{cite news \| last1=Demos \| first1=Telis \| last2=Rexrode \| first2=Christina \| title =FXCM to Get $300 Million Rescue Package From Jefferies\| work=] \| url =https://www.wsj.com/articles/fxcm-in-talks-for-rescue-package-from-jefferies-1421431006\| date=January 16, 2015 \| url-access=subscription}}</ref><ref name="MWRescue">{{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}}</ref> 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.<ref name="BISwiss">{{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}}</ref><ref name="CNBCSwiss">{{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}}</ref> In September 2016, Leucadia extended the original two-year loan by one year.<ref name="WSJ2016">{{cite news \| last=Jamerson \| first=Joshua \| title=FXCM, Leucadia Amend Terms of Rescue Package \| work=] \| url=https://www.wsj.com/articles/fxcm-leucadia-amend-terms-of-rescue-package-1472736387 \| date=September 1, 2016 \| url-access=subscription}}</ref>
	\|url=http://www.sec.gov/Archives/edgar/data/1499912/000114420411064049/v239353_10q.htm
	\|title=FXCM 10K Statement Q3 2011, Page 25
	\|date=November 14, 2011
	}}</ref>

			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 ] 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.<ref name="KMFT2717"/><ref name="ForbesBan">{{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}}</ref><ref name="MWBan">{{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}}</ref> All 40,000 of FXCM's U.S. accounts were sold to Gain Capital.<ref name="bloom022417"/>
	In June 2012 FXCM bought a controlling stake in Lucid Markets LLP, a London-based automated trading group focused on currency trading.<ref>{{cite web \|url=https://www.wsj.com/article/SB10001424127887324747104579024833989031904.html \|title=FXCM Eyes Stake in Infinium \|publisher=The Wall Street Journal \|date=August 21, 2013}}</ref>

			Global Brokerage, Inc. remained listed on ] 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.<ref name="FFMay2017">{{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}}</ref> 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.<ref name="FMFastSale">{{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}}</ref> 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.<ref name="FMBank">{{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}}</ref>
	In November 2016, FXCM expanded to South Africa, with an office is based in Johannesburg.<ref>http://www.leaprate.com/2016/11/fxcm-opens-office-in-south-africa/</ref>

	===~~CFTC~~ ~~penalty~~ and ~~NFA~~ ~~membership~~ ~~revocation~~===		===2017–present: Bankruptcy and ownership by Jefferies===
			Global Brokerage, Inc. filed for Chapter 11 bankruptcy in November 2017 and was delisted from NASDAQ in December 2017.<ref name="FMBank"/><ref name="ReutersBank">{{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}}</ref><ref name="FMBank1">{{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}}</ref> 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.<ref name="LRReorg"/> Also in February 2018, FXCM rebranded itself as "FXCM: A Leucadia Company".<ref name="LRRebrand">{{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}}</ref> As of March 2018, FXCM remained the second-largest retail forex broker outside of ].<ref name="FMMarch">{{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}}</ref>
	FXCM promised its customers a "no dealing desk" trading system, taking prices from a number of major banks and allowing clients to trade the best price at any given time. This is also known as a ] (DMA) system, in contrast to a ] system more commonly used by forex brokers. In a "dealing desk" or market marker system, FXCM would be the counterparty to every trade and would profit only when its customers lost money, and would lose money whenever its customers profited. In a "no dealing desk" system FXCM would act simply as a ], getting a commission on every trade, while the banks take the risk on the trades and FXCM avoids a conflict of interest.

	On February 6, 2017, CFTC imposed a penalty of $7 million on FXCM for ] its retail customers. The Commission found that a closely related company was acting as the main market maker for its trades, and that FXCM lied to its customers about the market maker.

	The Commission prohibited the company from registering with CFTC, effectively banning it from the US commodity brokerage industry.<ref name=streetinsider>{{cite web\|title=CFTC Orders FXCM (FXCM) to Pay $7M Penalty for Defrauding of Retail Forex Customers\|url=http://www.streetinsider.com/dr/news.php?id=12502887&gfv=1\|website=StreetInsider\|publisher=StreetInsider\|accessdate=6 February 2017}}</ref> The same day, NFA barred FXCM from its membership.<ref name="NFAbarring">{{Cite web \|url=http://www.nfa.futures.org/news/newsRel.asp?ArticleID=4786 \|title=NFA bars New York retail foreign exchange dealer Forex Capital Markets, LLC and its principals Dror Niv, William Ahdout and Ornit Niv from membership \|date=February 6, 2017 \|access-date=February 7, 2017 \|publisher=NFA}}</ref> The company reacted by selling its US customer base to a rival forex broker ].<ref name="GainSale">{{Cite news \|url=http://www.leaprate.com/2017/02/fxcm-sells-its-us-clients-to-gain-capital-as-it-exits-us-forex-markets/ \|title=FXCM sells its US clients to Gain Capital as it exits US Forex market \|date=February 7, 2017 \|access-date=February 7, 2017 \|publisher=LeapRate}}</ref>

	On February 13, 2017 FXCM agreed to pay another fine of $650,000 to the CFTC to settle charges that FXCM was undercapitalized by $200,000,000 in January 2015.<ref name="Roy2">{{cite news\|last1=Stempel\|first1=Jonathan\|title=FXCM to pay $650,000 CFTC fine over capital shortfall\|url=http://www.reuters.com/article/us-fxcm-cftc-settlement-idUSKBN15S2GJ\|accessdate=February 23, 2017\|publisher=Reuters\|date=February 13, 2017}}</ref>

	As of March 4, 2017 the firm was not accepting customers from many countries, including ], ], the ], ], ], ], the United States, and the ].<ref>{{cite web\|last1=Nikolova\|first1=Maria\|title=FXCM.com removes all mention of Non Dealing Desk model\|url=http://financefeeds.com/fxcm-com-removes-mention-non-dealing-desk-model/\|website=Finance Feeds\|accessdate=March 4, 2017\|date=March 4, 2017}}</ref>

	===Global Brokerage Inc. regulatory reports===
	Global Brokerage, the owner of FXCM, filed a ] report on March 20, 2017<ref name="3201710K">{{cite web\|title=Global Brokerage, Inc., Form 10-K\|url=http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=11941555-925-738689&type=sect&TabIndex=2&companyid=836552&ppu=%252fdefault.aspx%253fcik%253d1499912\|website=Edgar Online\|publisher=]\|accessdate=March 20, 2017}}</ref><ref name="FF32017">{{cite web\|last1=Nikoleva\|first1=Maria\|title=FXCM (Global Brokerage Inc) warns of heavy risks due to Leucadia deal, regulatory action\|url=http://financefeeds.com/fxcm-global-brokerage-inc-warns-heavy-risks-due-leucadia-deal-regulatory-action/\|website=FinanceFeeds\|accessdate=March 20, 2017}}</ref> stating:
	{{Quote\|The Company’s subsidiaries are cooperating with regulatory authorities outside the U.S. in relation to their requests for information arising from the settlements announced on February 6, 2017.}}
	and
	{{Quote\|The Convertible Notes mature on June 15, 2018. At that time, we will be obligated to repay the aggregate principal amount of the Convertible Notes. We may not have enough available cash or be able to obtain financing at that time to meet our repayment obligations”}}

	==Operations==
	FXCM was headquartered in New York with offices in Hong Kong, London, Tokyo, Paris, Berlin, Sydney, Dubai, Beirut, Milan, Santiago de Chile, Athens, Jerusalem and Tel Aviv. FXCM also owned the Forex trading news and research web site ] before its sale to ].<ref>{{cite news\|last1=Golovtchenko\|first1=Victor\|title=Breaking: IG Group Buys DailyFX from FXCM for $40m\|url=http://www.financemagnates.com/forex/brokers/breaking-ig-group-buys-fxcm-dailyfx-40-mln/\|accessdate=10 October 2016\|work=Finance Magnates\|date=30 September 2016}}</ref>

	===Industry criticism===
	] of the industry state that few retail traders have the experience to make money trading forex. Drew Niv, then chief executive of FXCM, said: "If 15% of day traders are profitable I'd be surprised."<ref name="WSJ">{{cite news
	\|last =Karmin
	\|first =Craig
	\|author2=MICHAEL R. SESIT
	\|title =Currency Markets Draw Speculation, Fraud
	\|work=The Wall Street Journal
	\|publisher =Dow Jones and Company
	\|date=July 26, 2005
	\|url =https://www.wsj.com/articles/SB112233048975295402
	\|accessdate =October 31, 2007
	}}</ref> The ] quoted Marc Prosser, then Chief Marketing Officer at FXCM saying "Don't just call it investing - this is speculation, and people should only be putting up risk capital they can afford to lose."<ref name="NYTimes1">{{cite news \| last =Egan \| first =Jack \| title =Check the Currency Risk. Then Multiply by 100 \| work =] \|date=2005-06-19
	\| url =https://www.nytimes.com/2005/06/19/business/yourmoney/19fore.html?_r=2&adxnnl=1&oref=slogin&adxnnlx=1191337503-g1yHfewhqPWye0XtI+Eq0A&oref=slogin
	\| accessdate =2007-10-30}}</ref>
	In each quarter of 2014, between 67% and 70% of FXCM open customer accounts lost money. Then in January 2015, due to trading in Swiss francs, their customers lost another $225 million or more.<ref name="bloomy">{{cite news\|last1=Evans\|first1=David\|last2=Buckland\|first2=Kevin\|title=Casualties From Swiss Shock Spread From New York to New Zealand\|url=https://www.bloomberg.com/news/articles/2015-01-15/new-zealand-currency-broker-closes-on-losses-after-swiss-shock\|accessdate=March 14, 2017\|publisher=Bloomberg\|date=January 16, 2015}}</ref>

	==References==		==References==
	{{~~reflist~~\|colwidth=30em}}		{{Reflist\|colwidth=30em}}

	==External links==		==External links==
			*{{Official website}}
	*, February 6, 2017
			{{Finance links historical
	*{{cite news\|title=Regulator penalises US forex trading group FXCM twice\|url=https://www.ft.com/content/1b5dcd8c-9ee5-11e3-8663-00144feab7de\|accessdate=February 24, 2017\|publisher=Financial Times\|date=February 26, 2014}}
			\| name = FXCM

			\| sec_cik = 0001499912
	{{Use mdy dates\|date=April 2012}}
			}}

			{{Online brokerages}}
			{{Authority control}}

			]
	]		]
	]		]
	]		]
			]
			]

Latest revision as of 14:19, 18 September 2024

Online Foreign exchange market broker based in the United States

FXCM

Company type	Subsidiary
Traded as	Nasdaq: FXCM
ISIN	US3026931069
Industry	Financial services
Founded	1999; 25 years ago (1999)
Founder	Drew Niv
Headquarters	New York
Key people	Brendan Callan, CEO
Services	Broker Foreign exchange market
Parent	Jefferies Financial Group
Website	www.fxcm.com

FXCM, also known as Forex Capital Markets, is a retail foreign exchange broker for trading on the foreign exchange market. FXCM allows people to speculate on the foreign exchange market and provides trading in contract for difference (CFDs) on major indices and commodities such as gold and crude oil. It is based in London.

The company was banned from United States markets for defrauding its customers. Its former parent company, Global Brokerage, Inc. filed for bankruptcy on December 11, 2017. The operating company, known as FXCM Group, is now owned by Jefferies Financial Group, which changed its name from Leucadia National Corporation in 2018. Global Brokerage shareholders lost over 98% of their investment since January 2015.

On February 6, 2017, the firm agreed to pay a $7 million penalty to settle a suit from the U.S. Commodity Futures Trading Commission (CFTC) involving fraudulent misrepresentation by FXCM to its customers and to regulators. FXCM withdrew its CFTC registration and agreed not to re-register in the future, effectively banning it from trading in the United States. Three top managers resigned under regulatory pressure and the majority owner of the firm changed its name to Global Brokerage Inc., effective January 27, 2017.

Global Brokerage filed for bankruptcy in November 2017, but officially reorganized in February 2018. While the company technically owns a 51% equity stake in FXCM Group, its agreement with Leucadia (now Jefferies Financial Group) and FXCM about future distributions of cash flows places its real economic interest in FXCM at 10 to 50%. Jefferies Financial Group remains the de facto parent company of the FXCM Group.

A Managing Director of Jefferies Financial Group, which before the bankruptcy held a 49.9% equity stake in the operating company, was appointed chairman of the FXCM Group board. Its U.S. accounts were sold to Gain Capital. About 40,000 customer accounts were sold at about $375 each.

History

1999–2008: Founding and Refco stake

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.

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.

In November 2005, Refco agreed, in part, to sell its 35% stake back (which included 15,000 customer accounts) to FXCM for $110 million. In March 2006, however, Refco's creditors disallowed the deal and, later, denied a separate $130 million bid by FXCM. Refco's stake in FXCM was eventually sold to a consortium of buyers, including Lehman Brothers Holdings.

2009–2014: Legal issues and initial public offering

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.

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. In its IPO prospectus, FXCM described its no dealing desk trade execution.

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.

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. 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. 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. 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.

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). In 2013, FXCM bought a $12-million note issued by Infinium Capital Management, a high-speed trader based in Chicago. FXCM later purchased five trading desks and some physical assets from Infinium in March 2014.

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.

2015–2017: Swiss franc jump and U.S. license loss

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. 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%. 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. In September 2016, Leucadia extended the original two-year loan by one year.

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. 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. 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. 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.

2017–present: Bankruptcy and ownership by Jefferies

Global Brokerage, Inc. filed for Chapter 11 bankruptcy in November 2017 and was delisted from NASDAQ in December 2017. 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". As of March 2018, FXCM remained the second-largest retail forex broker outside of Japan.

References

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External links

Official website
- Historical business data for FXCM:
- SEC filings

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