FXCM agrees to purchase Refco FX accounts
14 November 2005 | 2059 views | 0
Source: Forex Capital Markets
Forex Capital Markets LLC (FXCM) has signed a Memorandum of Understanding with units of Refco, Inc., with an agreement to do the following: FXCM or an affiliate has agreed to purchase the retail client accounts of Refco FX Associates LLC, which are traded on the FX Trading Station platform.
FXCM has also agreed to buy the 35% share of Forex Capital Markets LLC currently owned by Refco Group Ltd LLC.
The announcement was made today by Drew Niv, CEO of Forex Capital Markets, the foreign exchange brokerage firm. FXCM is a Futures Commission Merchant registered with the CFTC and is a member of the National Futures Association.
"Both purchases are subject to the approval of the U.S Bankruptcy Court, which is currently overseeing Refco's chapter 11 cases," said Niv.
At the moment, the RefcoFX clients are not permitted to withdraw funds in their trading accounts.
"A purchase will liberate their customers from the bankruptcy proceedings, and give them full access to their funds," said Niv. "Upon completion of this purchase, RefcoFX account holders will be able to withdraw their funds, deposit them, trade with them – in short, carry out all normal account procedures."
"FXCM is protecting the reputation of the online foreign exchange industry by demonstrating that there are strong, responsible forex firms able to stabilize the industry in difficult times. We believe that our efforts to make these customers whole underlines that commitment," said Niv.
"This transaction is subject to the approval of the bankruptcy court, after an open bidding process whereby other potential buyers may also compete with FXCM for these assets but will also be required to protect retail customer accounts. The MOU contains a schedule that could result in a closing of a transaction within thirty days. Then all of RefcoFX retail clients' funds currently tied up in the bankruptcy proceedings would be available to them," said Niv.