The law firm Johnson & Weaver LLP today said that it is investigating whether FXCM was in breach of state or federal laws. However the firm stopped short of committing to legal action, saying that the investigation is only in its preliminary stages.
Johnson & Weaver’s lawyers will investigate whether FXCM violated the law after the CFTC found that the retail FX broker had an undisclosed interest in a market maker that consistently won the largest share of FXCM’s trading volume, and thus was taking positions opposite its retail customers.
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FXCM Holdings LLC and founding partners Dror Niv and William Ahdout have been banned from operating in the US to settle charges that they defrauded retail foreign exchange customers and engaged in false and misleading solicitations.
Specifically, Johnson & Weaver’s investigation will seek to determine if certain FXCM statements regarding its business were false or misleading when made. The law firm added that it is also reviewing the conduct of the broker’s officers and directors for the purpose of confirming whether they have engaged in any contraventions of applicable laws.
The company urged concerned shareholders who would like more information about their rights and potential remedies to contact Johnson & Weaver’s officers. It also asked FXCM’s staff to assist in the investigation alleging that the company’s conduct had put its customers in an unfair position.
Whistleblowers could now come forward as FXCM intends to implement a restructuring plan that includes the termination of approximately 150 employees, or about 18% of its global workforce.