Replies to post #11282 on Global Brokerage Inc. (GLBR)

[Crusen]

FXCM suffered a Black Swan event, trading was suspended and they were forced to accept a rescue loan to resume trading.

The terms of the rescue loan hand 90%+ of shareholder value over to a new entity, Leucadia (LUK).

Also, they lost $225 million dollars almost instantly. $100 million has been written off. The remaining $125 million may or may not be recovered.

The worst terms of the Leucadia bailout are forever, and cannot he avoided by paying off the loan.

[BorisB]

That is not accurate..

Read the following to understand why. This is a Quote from FXCM CEO Drew Niv.

The caveat of our no dealing-desk execution system is that traders are offset one for one with a liquidity provider. When a client entered a EUR/CHF trade with FXCM, FXCM Inc. had an identical trade with our liquidity providers. During the historic move, liquidity became extremely scarce and shallow, which affected execution prices. This liquidity issue resulted in some clients having a negative balance.

While clients could not cover their margin call with us we still had to cover the same margin call with our banks. When a client profits in the trade FXCM gives the profits to the customer, however, when the client is not profitable on that trade FXCM Inc. ends up having to pay the liquidity provider.
- See more at: forexmagnates.com/exclusive-fxcm-inc-ceo-drew-niv-discusses-firms-future-after-the-chf-crisis/#sthash.bqn1mKcu.dpuf

Many FX brokers do not operate in this manner. Many FX brokers take the opposite side of the trade themselves, which in effect means they are trading against the trader.. They make money when the trader loses..
FXCM being what is called a Non Dealing Desk Broker does NOT trade against the Trader (customer)

There are many Brokers that are in fact Dealing Desk Brokers. Those brokers would Not have had this problem. Many matter of fact would have made a lot of money being on the other side of the trade.

FXCM was definitely not alone in having this problem.. Just not quite correct to say they all had this issue. Many did not.

I was a former client of theirs until the U.S. government decided to put in place regulations that made offshore brokers sever ties with U.S. clients back in the mid 2000's.
Never had any issues dealing with them at all. Good broker imo.

But most definitely the Swiss event was NOT of FXCM's doing in the least..

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