FXCM Issues Statement on CFTC Complaint

FXCM Inc. / FXCM Issues Statement on CFTC Complaint . Processed and transmitted by NASDAQ OMX Corporate Solutions. The issuer is solely responsible for the content of this announcement.

 

NEW YORK, Aug. 19, 2016 (GLOBE NEWSWIRE) -- FXCM Inc. (NYSE:FXCM) (or the "Company"), today issued a statement on the complaint filed yesterday by the Commodity Futures Trading Commission (the "CFTC") alleging violations of certain provisions of the Commodity Exchange Act.  The CFTC claims relate to the unprecedented and unforeseen crisis that occurred in January 2015 - more than twenty months ago - when the Swiss National Bank ("SNB") shocked the world currency market by announcing in the middle of a trading day that it was discontinuing the minimum exchange rate of the Swiss Franc to the Euro (the "SNB Event").  The Company is very disappointed by the CFTC's decision to file this complaint and attempt to punish FXCM who, like other market participants, was a victim of the SNB Event.   

The SNB Event damaged world markets and damaged FXCM and its customers.  By the close of business on January 15, 2015, FXCM customers lost approximately $225 million.  As a result of such losses, FXCM experienced for the very first and only time in its history a one-day regulatory net capital shortfall.  FXCM thereafter promptly notified both the CFTC and the National Futures Association (the "NFA") of its net capital shortfall due to the unforeseen SNB Event.  Within hours of that notification, teams of CFTC and NFA personnel were on site at FXCM's offices.

Faced with the crisis of the SNB Event, FXCM and its board of directors worked around the clock to raise the funds needed to cure its regulatory shortfall.  We succeeded.  By the next afternoon, the Company cured its capital shortfall through a $300 million loan from Leucadia National Corporation. We averted the crisis.  Given those facts, we could not be more disappointed that the CFTC has decided to pursue an undercapitalization violation claim against FXCM.  Such a claim under these circumstances is unprecedented and unwarranted.  We are also disappointed in the CFTC's intimation that the Company's "seatbelt" system contributed to the FXCM's undercapitalization during the SNB Event.  To the contrary, the Company's seatbelt system prevented FXCM and its customers from suffering additional trading losses that day.