FXCM owed $225 million by customers who lost on CHF

CHFlosses · Jan 16, 2015

http://www.zerohedge.com/news/2015-...-after-snb-surprise-breach-regulatory-capital

http://ir.fxcm.com/releasedetail.cfm?ReleaseID=891597

FXCM an online provider of forex trading and related services worldwide, announced today due to unprecedented volatility in EUR/CHF pair after the Swiss National Bank announcement this morning, clients experienced significant losses, generated negative equity balances owed to FXCM of approximately $225 million.

As a result of these debit balances, the company may be in breach of some regulatory capital requirements.

We are actively discussing alternatives to return our capital to levels prior to today's events and discussing the matter with our regulators.

spinola · Jan 16, 2015

Maybe they should sue the SNB , 2 days ago they publicly announced the floor was a cornerstone policy.

However , if by knowingly putting people at risk by failing to disclose material information , in the UK we have the FRAUD ACT 2006 etc, which makes it a criminal offence to knowingly expose people to loss, or risk of loss.

Or can central banks just lie, even though they might have been actively planning this for weeks, months etc ?

I was short AUSSIEYEN 96.47 and snatched 95.70 exit.

But, these bankers, must of known a couple days before they were plotting breaking the floor up , so why publicly announce the complete opposite 2 days earlier ?

It's dishonourable ! ? at best, and damn right thievery, in street terms ?

spinola · Jan 16, 2015

ohh, also the market was moving significantly before the SNB announcement too, some someone got ' tipped off '

The things money does to people, eh ?

Lord Flasheart · Jan 16, 2015

should be a full investigation if prices moved in advance. Why does it never seem to go the other way and they owe clients $millions?

YouAreNotFree · Jan 16, 2015

Shocking.

You just know that there was plenty of average Joe's with their limit buy orders just above the peg, trading a larger size than they normally would.

There must be some horror stories out there.

donaldduke · Jan 16, 2015

FXCM share trading seems to be suspended at the open. Look like opening 90% down.

karmit · Jan 16, 2015

guys - suggest not to open any account for the next few weeks... many dodgy outfits out there might take in a deposit and then go bankrupt!

ffsear · Jan 16, 2015

FXCM in talks with Jefferies over a $200m rescue package.

Just flashed up on bloomberg

tar · Jan 16, 2015

donaldduke said:
FXCM share trading seems to be suspended at the open. Look like opening 90% down.

ouch ...

spinola · Jan 16, 2015

*FXCM in Talks with Jefferies for $200 Million Rescue -Bloomberg 2015.01.16 18:11

Splitlink · Jan 16, 2015

When a currency is pegged to another, it is an artificial price. It happened to the GBP in 1992 and something will happen to any country's currency that leaves the euro.

There should be a law, but there isn't, so stop moaning about it and go out and get a job , you lazy so-and-sos.

spinola · Jan 16, 2015

Splitlink said:
When a currency is pegged to another, it is an artificial price. It happened to the GBP in 1992 and something will happen to any country's currency that leaves the euro.

There should be a law, but there isn't, so stop moaning about it and go out and get a job , you lazy so-and-sos.

Go long FXCM , Split ?

lordgeorge · Jan 16, 2015

is FXCM safe for now?, My main trading account is with them, I didn't take any losses so far but I'm terrified they will join Alpari and gow under!

Pat494 · Jan 16, 2015

Even my FXCM demo account has stopped ?

jkane · Jan 16, 2015

Pat494 said:
Even my FXCM demo account has stopped ?

fxcm UK working fine

Dentalfloss · Jan 16, 2015

NEW YORK (MarketWatch) -- Shares of Leucadia National Corp. LUK, +0.92% parent of investment bank Jefferies, were halted in midday trade Friday, pending a news announcement. Earlier reports said that Jefferies is in talks for a $200 million to $300 million rescue of currency broker FXCM FXCM, +0.00% FXCM stock has been halted since the premarket, when it fell a stunning 88%. The firm said in a statement that the volatility in trading of the Swiss franc Thursday had generated such heavy losses that it had a negative equity balance of about $225 million and it was trying to shore up its capital. The Swiss National Bank shocked the market by dropping its 1.20 floor for EUR/CHF and slashing interest rates to a negative 0.75%. The move caused a steep rally in the franc, that took many investors by

timsk · Jan 16, 2015

dentist007 said:
. . . The move caused a steep rally in the franc, that took many investors by

. . . their wedding tackle in a vice like grip?

(Just wondered how that sentenced finished!)

spinola · Jan 16, 2015

n an apparent replay for 2012's Knight Trading algo-implosion $400 million cash-infusion bailout, Jefferies (owned by NY-based I-bank Leucadia) is riding its white horse to the rescue of FXCM and its $200-million-plus client losses:

*LUK IN $300M DEAL TO LET FXCM CONTINUE NORMAL OPS: CNBC
*LEUCADIA GIVE FXCM $300M IN FINANCING CNBC
Leucadia will get $250m in senior notes as part of the deal, CNBC says. So - in summary - a central bank blew up an FX broker and a mid-market junk-bond underwriter bailed them out... must be good for a green close for the week in stocks!

forker · Jan 16, 2015

Reckless and irresponsible is that the SNB are. They need to be fined for this behaviour.

forker · Jan 16, 2015

Liquidity is surely going to be somewhat subdued for a while

FXCM owed $225 million by customers who lost on CHF

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