Fresh from agreeing a settlement with FXCM's UK subsidiary, the CFTC has stepped up its campaign in the courts against "unregistered" RFEDs by announcing that it is bringing civil actions against another 11 foreign currency firms. As in their first such sweep a number of those firms are based in far away places such as Belize, the British Virgin Islands and Cyprus. However two names stand out in the CFTC's blacklist of miscreants as being more "onshore" than the others, namely:
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Fresh from having their UK subsidiary fined by the CFTC earlier this month, FXCM have now been fined $2 million by the National Futures Association. Once again the complaint against FXCM and their CEO Drew Niv and details of the agreed settlement have been published simultaneously. Once again FXCM neither admit nor deny the allegations in the complaint, which concern FXCM's failure to pass on positive slippage from their liquidity providers to their customers, and lapses in their anti money laundering procedures. However this time around FXCM's customers do stand to benefit financially since one of the agreed sanctions states that:
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Last October we wondered what steps the CFTC would be able to take to enforce the new forex trading regulations that had just come into force, particularly when it came to pursuing offshore brokers in offshore courts. Back in January they sued a few brokers using the US courts. Now they have used a different approach, which still hasn't required the CFTC to state their case in a foreign jurisdiction. It seems all they need to do is to ask nicely for some money!
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We suggested just after Christmas that FXCM were building an acquisitions war chest, and that's how things are now starting to pan out. At the beginning of this month the Wall Street Journal reported that:
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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.
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Following their recent IPOs US brokers GAIN Capital and FXCM now seem to be engaged in a battle for the hearts and minds of retail forex traders instead of investors in their respective businesses. In a press release today FXCM announced a new section on their website which they call the FXCM Forex Execution Center. I can't help but wonder if that announcement is in any way related to the new Pricing and Execution section on GAIN's Forex.com website and their Trade Execution Scorecard, which was announced in a press release yesterday.
More on Dealing Desk or No Dealing Desk – Forex.com or FXCM?
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Earlier this week Robert Lande, chief financial officer of US broker FXCM Inc, was interviewed on Bloomberg about the prospects for FXCM following their recent IPO. Robert also talked about the prospects for retail forex in general. Here's that interview:
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US broker FXCM announced a new educational website for forex traders today. FXCM Digital Expo is separate from their existing DailyFX portal, and makes available over 40 videos recorded at FXCM’s Forex Trading Expo in Las Vegas. Apart from simply viewing the videos on the new web site you can also download them free of charge using iTunes. The slides used during the original presentations can be downloaded too.
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The first of what may eventually turn into a trio of forex initial public offerings finally came to fruition yesterday evening when FXCM announced that:
Its initial public offering of 15,060,000 shares of its Class A common stock has been priced at $14.00 per share. The shares are expected to begin trading tomorrow, December 2, 2010, on the New York Stock Exchange under the ticker symbol “FXCM.” The underwriters have been granted a 30-day option to purchase up to 2,259,000 additional shares of Class A common stock at the public offering price less the underwriting discount from FXCM if the underwriters sell more than 15,060,000 shares in the offering.
Time will tell if the underwriters manage to collect those additional shares at a bargain basement price, but FXCM seem to be well on the way to raising over $200 million in new capital. According to Bloomberg:
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The Betfair Group IPO was initially mooted back in 2005, but was then put back on the shelf. On September 21st Betfair announced that they intended to list their shares on the London Stock Exchange and last week the prospectus was published at long last, informing any interested readers that:
More on Betfair IPO a Success. Will FXCM Succeed Where GAIN Did Not?
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