http://finance.yahoo.com/news/fxcm-comments-swiss-franc-movement-010419906.html http://www.zerohedge.com/news/2015-...-after-snb-surprise-breach-regulatory-capital 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.
MF Global thread: http://www.elitetrader.com/et/index.php?threads/mf-global-announcement.122834/ Refco thread: http://www.elitetrader.com/et/index.php?threads/refco-shares-plunged-45.56863/
This photo suggests FXCM has no recourse: https://twitter.com/shallarn/status/555932622061203456/photo/1
FXCM deserves to go BUST! They betrayed their customers for years through various shaddy "techniques" like: - platform freeze after the release of important macro economic figures in order to diminish their B Book losses - Sunday night "price spikes" or "price falls" in order to hit stop loss orders by clients and collect their margins - deliberately offering clients high leverage in order to collect total loss accounts and therefore margins through their B Book model The principal model (as it is named in the industry) made FXCM a huge players in the retail industry. Capital shortfall is exactly what they deserve. But 220 Million will not kill their business. Over the years the owners and shareholders collected much more. I expect they will cover the monies by writing a cheque overnight.
Your optimism is admirable. What do you mean by "writing a cheque overnight" ? Given that: "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." then the company needs to raise capital ASAP, or else risk bankruptcy. Particularly if customers are moving to more stable firms.
Discussion on ForexFactory: http://www.forexfactory.com/showthread.php?t=8960&page=291 http://www.forexfactory.com/showthread.php?p=7998476#post7998476 "have put a withdrawal request for 95% of my account. i don't wanna induce panic. but i don't feel safe in this environment. i also don't think it's unethical since fxcm should have had segregated accounts for their customers. what bothers me the most is that they aren't answering by phone or chat. i understand the loss is $220 mil but that doesn't help me to see any step further without additional info (given to the press) into the next days. man, and i was thinking yesterday or so what would i do if i were to live in greece? would i run to the bank and keep my money under the mattress? now i'm doing exactly the same thing. at least, what i hold for sure into my hand, is a confirmation mail that my request is processed. if fxcm goes belly-up, at least i'm ahead of their filling for chapter 9 (or whatever). "
Looks like there are vastly different rules for customer monies (and segregation of customer monies from FXCM assets) depending on the specific country and entity of which one is a customer. eg. USA: not safe http://www.elitetrader.com/et/index.php?threads/fxcm-says-that-your-money-is-our-money.216969/page-2 eg. most UK accounts: segregated http://www.elitetrader.com/et/index.php?threads/fxcm-says-that-your-money-is-our-money.216969/page-2 eg. Australian accounts: segregated http://www.forextrading.com.au/advantages/safety-of-funds/
Some discussion (July 2014) from Forex Factory about segregation of customer funds at FXCM http://www.forexfactory.com/showthread.php?p=7604624#post7604624 .