Here is another bad news about one of the most legendary forex brokers in the industry. Perhaps more appropriate to say once renowned, now troublesome. FXCM’s parent company Global Brokerage Inc announced last night that the company is going to file Chapter 11 which means that it is to undergo bankruptcy procedures. Global Brokerages Inc is also considering to be delisted from NASDAQ, board member changes and other restructring measures.
Global Brokerage Inc’s subsidiary Global Brokerage Holdings (by 74.5% interest) owns 50.1% of FXCM. Therefore the firm has an indirect 37.3% ownership of FXCM. Just for the record, other half of FXCM is owned by Leucadia National which loaned bail-out funds to FXCM in 2015 January following the firm’s massive losses due to Frank appreciation after SNB’s sudden decision to remove EURCHF floor.
FXCM and Clients Not Affected
Okay. Here is an important caveat. Thanks to FXCM management’s visionary policies, the company took several steps in past few months to distance itself from Global Brokerage Inc. Consequently FXCM and clients are said not to be affected by the parent company’s Chapter 11 filing.
Commenting on the bankrupty news, The CEO of FXCM, Brendan Callan, stated that “FXCM clients should know that Global Brokerage’s refinancing does not affect FXCM Group, which continues to operate as usual. Global Brokerage’s plan is positive news for FXCM as it allows us to put GLBR’s distractions behind us.”
Additionally, The Chairman of the Board of FXCM and Managing Director of Leucadia, Jimmy Hallac, said “We are very pleased that Global Brokerage has pursued a path that, in relatively short order, will resolve the uncertainties relating to its future. We believe that the Restructuring is a very positive thing for FXCM that will allow the firm to put to rest any remaining uncertainties surrounding its ability to drive forward and continue to plan for the future following the changes in early 2017. To that end, Leucadia extended our credit agreement to give FXCM even better flexibility to achieve that goal.”
Although FXCM’s attempts to distinguish the company from Global Brokerage Inc, the whole thing has already put another stigma on FXCM’s struggle in last two years. It is really sad to hear all those negative news about a forex broker who was once leading the industry worldwidely. Hoping bright news to come.