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FXCM - From Leader to Bankrupt?
Global Brokerage, a company that has recently "changed" itself from FXCM, may collapse soon. Not so long ago, it was the leader in the US retail Forex market. And now? Expelled from their home jurisdiction, they hang on the verge of insolvency.
FXCM (Global Brokerage) problems began at the beginning of February. That's when the US regulator decided to impose criminal sanctions on a company that has committed many abuses in recent years. A more painful blow from 7 million USD fine was forbidden to continue operations in the United States. FXCM had almost that moment 50 000 active customerswho were eventually "sold" to Gain Capital. It was supposed to save the day. The company, although it could not provide services to US investors, was still listed on the NASDAQ. Hence the idea to quickly change the name, which was to be "better" associated and leave a distaste behind.
The quarterly report augurs ... Trouble
The NASDAQ stock exchange issued a warning that the company could be withdrawn from trading due to its very low valuation.
Annual Global Brokerage chart, NASDAQ
The quarterly results published this week do not bode well for sure. In the first quarter of 2017, the company recorded a loss of USD 30 million, while in the same period a year earlier it earned USD 50 million. Revenues plunged down by as much as 24%. One of the key pieces of information in the report, however, is the date of October 30, 2017. It is by then that Global Brokerage has time to increase its market value. Otherwise, it will leave NASDAQ. This also means a problem with debt repayment to Leucadia National Corporation. It was this company that saved FXCM from bankruptcy after the memorable January 15, 2015.
Looking further in the report, you can find information about a decrease in the volume of clients by USD 26 billion and a reduction of active accounts by 1900. Currently, Global Brokerage serves over 130 actively investing clients, which is an exceptionally good result in the face of the disclosed facts.
