FXCM

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Online Foreign exchange market broker based in the United States

title: "FXCM" type: doc version: 1 created: 2026-02-28 author: "Wikipedia contributors" status: active scope: public tags: ["financial-services-companies-established-in-1999", "financial-derivative-trading-companies", "foreign-exchange-companies", "2010-initial-public-offerings", "1999-establishments-in-new-york-(state)", "financial-services-companies-based-in-new-york-(state)"] description: "Online Foreign exchange market broker based in the United States" topic_path: "general/financial-services-companies-established-in-1999" source: "https://en.wikipedia.org/wiki/FXCM" license: "CC BY-SA 4.0" wikipedia_page_id: 0 wikipedia_revision_id: 0

::summary Online Foreign exchange market broker based in the United States ::

::data[format=table title="Infobox company"]

FieldValue
nameFXCM
logoFXCM logo.svg
typeSubsidiary
traded_as
founderDrew Niv
key_peopleBrendan Callan (CEO)
industryFinancial services
servicesBrokerForeign exchange market
parentJefferies Financial Group
foundation
::

| name = FXCM | logo = FXCM logo.svg | type = Subsidiary | traded_as = | founder = Drew Niv | key_people = Brendan Callan (CEO) | industry = Financial services | services = BrokerForeign exchange market | revenue = | operating_income = | net_income = | assets = | num_employees = | parent = Jefferies Financial Group | foundation = | location_city = | location_country =

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. ::quote

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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

References

  1. "FXCM Group Elevates Brendan Callan to CEO Following Successful Interim Stint". Finance Magnates.
  2. (February 7, 2017). "US regulators slap down FXCM for trading against own clients". [[Financial Times]].
  3. (May 18, 2017). "Exclusive: FXCM UK does not expect market maker repercussions like in the US". LeapRate.
  4. (November 14, 2017). "Global Brokerage expects to commence Chapter 11 bankruptcy case by December 20, 2017".
  5. (April 9, 2018). "Leucadia to shed most non-financial assets, rename as 'Jefferies'". [[Reuters]].
  6. "FXCM Split History".
  7. (February 6, 2017). "FXCM To Pay $7 M For Hiding Deal With Market Maker". [[LexisNexis]].
  8. Chavez-Dreyfuss, Gertrude. (February 21, 2017). "FXCM changes company name; appoints interim CEO". [[Reuters]].
  9. (February 24, 2017). "Gain Capital Is Set to Become the Biggest U.S. Retail FX Provider".
  10. (February 21, 2017). "FXCM names interim CEO, changes name to Global Brokerage".
  11. (February 6, 2017). "NFA bars New York retail foreign exchange dealer Forex Capital Markets, LLC and its principals Dror Niv, William Ahdout and Ornit Niv from membership". NFA.
  12. (February 9, 2018). "Global Brokerage successfully exits bankruptcy, convertible notes replaced". LeapRate.
  13. (April 12, 2017). "FXCM remains in the game with March volumes up 12% to $225 billion".
  14. (February 21, 2017). "Breaking: FXCM Group Promotes Brendan Callan to CEO Leucadia Appoints Chairman".
  15. (November 9, 2017). "GAIN Capital puts sum paid for FXCM US client accounts at $7.2m at end of Q3'2017". FinanceFeeds.
  16. (October 2, 2015). "FXCM Sells Forex News Website DailyFX.com for $40 Million". FXdailyReport.Com.
  17. (July 4, 2008). "Ex-Refco Chief Sentenced to 16 Years in Cover-Up". [[The New York Times]].
  18. (November 11, 2005). "Refco agrees to sell part of forex brokerage". [[Financial Times]].
  19. McMahon, Chris. (January 31, 2007). "Refco FX clients left with little in account". Futures.
  20. Farrell, Maureen. (January 16, 2015). "A Brief History of FXCM". The Wall Street Journal.
  21. Wilson, Harry. (May 4, 2010). "Forex broker ODL accepts US takeover". [[The Daily Telegraph]].
  22. Greenberg, Michael. (May 4, 2010). "FXCM acquires ODL Group to form world's largest Forex broker (Updated)". Finance Magnates.
  23. Cowan, Lynn. (December 3, 2010). "Online Currency Broker Closes Up 6% in Debut". The Wall Street Journal.
  24. Crum, Rex. (December 2, 2010). "FXCM rises 7% following IPO".
  25. Greenberg, Michael. (December 2, 2010). "FXCM successfully completes IPO, final value $1.05 billion". Finance Magnates.
  26. (December 1, 2010). "Initial Public Offering, FXCM Inc., Class A Common Stock". Securities and Exchange Commission.
  27. Greenberg, Michael. (August 13, 2018). "NFA fines FXCM $2 million for slippage malpractices, FXCM will credit clients back". Finance Magnates.
  28. (August 12, 2011). "NFA levies $2,000,000 monetary sanction against FXCM and orders refunds to customers". National Futures Association.
  29. Gallu, Joshua. (October 3, 2011). "FXCM Agrees to Pay $14 Million to Resolve CFTC 'Slippage' Claims". Bloomberg.
  30. Kilgore, Tomi. (February 8, 2017). "FXCM's stock plunge to record low highlights risks to retail currency investors". [[MarketWatch]].
  31. (February 10, 2011). "Morgan Business Trial Group Files Class Action Lawsuit Against Nation's Largest Forex Dealer – FXCM".
  32. (February 16, 2011). "Kahn Swick & Foti, LLC And Former Louisiana Attorney General Announce Investigation Into FXCM, Inc. – FXCM".
  33. (February 17, 2011). "Law Offices of Howard G. Smith Announces Investigation On Behalf of Investors of FXCM Inc.".
  34. (February 8, 2017). "FXCM's stock plunge to record low highlights risks to retail currency investors". Dow Jones.
  35. Englander, David. (November 10, 2012). "A Fast-Growing Money Machine". Barron's.
  36. Szalay, Eva. (June 14, 2012). "FXCM grabs 50% controlling stake in Lucid Markets". [[MarketWatch]].
  37. Greenberg, Michael. (June 19, 2012). "Credit Suisse teams up with FXCM in launching FastMatch the new ECN forex platform". Finance Magnates.
  38. Polansek, Tom. (January 9, 2014). "Struggling Infinium Capital negotiates to sell assets to FXCM". [[Reuters]].
  39. (March 6, 2014). "High-speed trader Infinium stops trading, winds down". Chicago Tribune.
  40. (February 26, 2014). "Regulator penalises US forex trading group FXCM twice". [[Financial Times]].
  41. Finberg, Ron. (February 26, 2014). "FXCM UK Announces $16.9 Million Settlement with FCA for Asymmetric Slippage". Finance Magnates.
  42. Schaefer, Steve. (January 16, 2015). "Swiss Franc Stunner Claims Victims, Currency Broker FXCM Bludgeoned". [[Forbes]].
  43. (January 16, 2015). "FXCM to Get $300 Million Rescue Package From Jefferies". [[The Wall Street Journal]].
  44. (January 20, 2015). "FXCM rescue package includes rising interest rate".
  45. Udland, Myles. (January 28, 2015). "Currency Broker FXCM Is Bailing Out Mom And Pop".
  46. Caronna, Michael. (January 28, 2015). "FXCM to 'forgive' most clients for negative balances on Swiss franc move". CNBC.
  47. Jamerson, Joshua. (September 1, 2016). "FXCM, Leucadia Amend Terms of Rescue Package". [[The Wall Street Journal]].
  48. Green, Robert A.. (March 1, 2017). "Learn Why The NFA Barred FXCM And What It Means For Forex Traders".
  49. Goldstein, Steve. (February 6, 2017). "FXCM banned by CFTC after taking positions against clients".
  50. Nikolova, Maria. (May 8, 2017). "FXCM (Global Brokerage) runs into trouble with NASDAQ listing". Finance Feeds.
  51. Patterson, Jeff. (August 14, 2017). "FXCM Closes FastMatch Sale, $66.8m Still Owed to Leucadia". Finance Magnates.
  52. Abdel-Qader, Aziz. (December 8, 2017). "Global Brokerage Applies for Voluntary Delisting from Nasdaq Exchange". Finance Magnates.
  53. (December 11, 2017). "BRIEF-Global Brokerage, Inc. Receives Approximately 78.5% Yes Votes To Move Forward With The Prepackaged Plan Of Reorganization". Reuters.
  54. Golovtchenko, Victor. (November 11, 2017). "Breaking: Global Brokerage Files for Bankruptcy, NASDAQ Delisting Pending". Finance Magnates.
  55. (February 21, 2018). "Exclusive: FXCM rebrands, adds 'Leucadia' into its logo". LeapRate.
  56. Majewski, Sylwester. (March 14, 2018). "Analysis: FXCM Remains in the Top 5 in 2017". Finance Magnates.

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financial-services-companies-established-in-1999financial-derivative-trading-companiesforeign-exchange-companies2010-initial-public-offerings1999-establishments-in-new-york-(state)financial-services-companies-based-in-new-york-(state)