FXCM Accused of Fraud in Class Action Lawsuit
In a press release issued earlier today The Business Trial Group of Morgan & Morgan, P.A. announced that it had filed a class action lawsuit today against Forex Capital Markets, LLC (FXCM) alleging fraud and racketeering. My thanks to Michael Greenberg over at ForexMagnates for bringing this interesting piece of news to my attention.
Morgan and Morgan say that FXCM are "the nation's largest Forex dealer", but they don't say how they came to that conclusion. There are lots of ways of doing that calculation, but personally I'd prefer to settle for "one of the largest US retail forex dealers" instead. Be that as it may, Morgan and Morgan are acting on behalf of:
William H. Sanders, of Muscogee, Oklahoma, and all other similarly situated FXCM customers
Accusing FXCM of fraud by misrepresenting itself as a trading platform that is free from dealer intervention or manipulation. Instead, Sanders alleges, FXCM uses a number of devices and tricks, including software applications, designed specifically to interfere with customers' trades.
Recently the NFA fined GAIN Capital and Ikon for their use (and alleged abuse) of the infamous MetaTrader 4 Virtual Dealer plugin, so quite possibly Morgan and Morgan are going to pursue a similar angle in this case? The press release certainly alleges :
That FXCM engaged in a pattern of racketeering activity by collaborating with its software developers and programmers to develop a "diabolical" software application that provides FXCM with a myriad of tools and system commands with which to interfere with customers' trades, including routing trades to "slow" servers and sending false "error" messages when customers attempt to close out profitable trades.
What with one thing and another I can't help thinking that this won't be the last lawsuit directed at US forex brokers both large and small during 2011.
Filed under Brokers by