Appeals Court refuses to revive black swan lawsuit against FXCM Inc

Sourced from: https://financefeeds.com/appeals-court-refuses-to-revive-black-swan-lawsuit-against-fxcm-inc/

What’s more, allegations as to previous volatile money events or the big reductions in FXCM’s capital they caused”weigh against a finding of scienter,” as they”show that FXCM’s model was able to defy high-volatility events.”

Although the Court agrees with the plaintiff that the defendants should have understood that, because the SNB’s peg of the Franc to the Euro was temporary, it would be raised at any stage and the cost of the Franc would inevitably change. On the other hand, the Court disagrees which it thus follows that Niv always knew of the”potentially crippling consequences” such an event could trigger for FXCM.
The Appeals Court has sided with the defendants. From the summary order, the Appeals Court claims that it agrees with the district court that the plaintiff has not alleged facts.
Further, the Appeals Court finds that the plaintiff’s allegations to a”cover up” following the de-pegging don’t suffice to make a strong inference of scienter either. Plaintiff attempts to produce a lot of many”contradictions” in statements in emails as well as the Commodity Futures Trading Commission in regards to the kind of losses FXCM suffered and whether FXCM undergone liquidity failures throughout the crash. But to the extent these statements are even contradictory (which, since the district court pointed out, they may not be more ), this”will not make it more likely that before January 15, 2015, Niv considered the de-pegging of the Euro and also the siphoned a significant risk, and lied to investors concerning this danger.”
The plaintiff had alleged, especially, that FXCM and Niv misled investors about the dangers associated with FXCM’s business, especially with respect to the risks connected with FXCM’s”bureau model,” FXCM’s leverage policies, and FXCM’s exposure to enormous losses when the Euro were de-pegged from the Swiss Franc.
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The post Appeals Court won’t renew shameful swan lawsuit against FXCM Inc appeared initially on FinanceFeeds.

As reported by FinanceFeeds in August last year, the plaintiffs in lawsuit about the events from January 15, 2015, contested a ruling by the New York Southern District Court which dismissed the criticism against FXCM Inc, now known as International Brokerage Inc (OTCMKTS:GLBR), along with Drew Niv.

The plaintiff in the case – the Retirement Board of the Policemen’s Annuity and Benefit Fund of Chicago on Behalf of the Policemen’s Annuity and Benefit Fund of Chicago, is an institutional investor that bought FXCM common stock from March 17, 2014, up to and including January 20, 2015. This class action was brought by it on behalf of those who purchased or otherwise acquired FXCM stock during the Class Period and were damaged thereby.
Allegations about Defendants’ representations of FXCM’s business model amount to no more than”fraud by hindsight”, the Court states.
Instead, the plaintiff concentrated on, inter alia, how Niv”falsely described the dangers inherent in FXCM’s company” as well as the danger FXCM took by holding such a large place in the EUR/CHF money pair.

Judgment Mandate issued from the Second Circuit U.S. Court of Appeals on May 9, 2019, includes a Summary Order which affirms the ruling of the district court. Put otherwise, the “black swan” the event against FXCM and its former mind will not be revived.
The fact that many of the competitors of FXCM changed their gross profit policies from the months leading up to the de-pegging whilst FXCM did not on the EUR/CHF pair, can’t raise a strong inference of scienter on the part of the defendants.

The plaintiff is said to be relying on statements in the wake of the shock brought on by the Swiss National Bank’s move to de-peg the Franc in the Euro from economists and other market participants that they did not fully understand the dangers that FXCM had been carrying. However, these allegations, the Court claims, don’t constitute strong circumstantial evidence of conscious or irresponsible behavior on the defendants’ part when, according to the plaintiff’s complaint, the SNB’s decision to de-peg and its attendant consequences were themselves deemed by the marketplace for a”black swan-like” event.

TFS-ICAP’s former Global Head of Emerging Markets broking argues against CFTC complaint

Sourced from: https://financefeeds.com/tfs-icaps-former-global-head-of-emerging-markets-broking-argues-against-cftc-complaint/

The letter also explains that during a telephone conference on April 5, 2019, counsel for the CFTC focused particularly on a pair of allegations in the CFTC’s lawsuit against Mr. Woolfenden. These allegations, as stated by the defense counsel, are insufficient.
The CFTC relies upon the fact that Mr. Woolfenden registered as an Associated Individual with the CFTC. However, this argument is played down from the shield. They claim the CFTC cites no need to support the proposal that CFTC registrants are subject to personal empowerment.
In addition, the safety notes the inspection of Mr. Woolfenden’so behavior is appropriately being done by the UK Financial Conduct Authority, whose investigation remains ongoing.
The CFTC, the defense counselor notes, cites no case law.

The situation continues at the New York Southern District Court.
Soon after Jeremy Woolfenden, former Global Head of Emerging Markets broking in TFS-ICAP, made clear his aims to proceed to dismiss the case against him due to the United States Commodity Futures Trading Commission (CFTC), the defendant has submitted a lien using the New York Southern District Court detailing his arguments on the case against him must be nixed for lack of personal jurisdiction.

“Mr. Woolfenden is not TFS-ICAP, and his involvement in treating many others at the U.K. as a part of TFS-ICAP doesn’t transmogrify his job in the United Kingdom into personal authority in the United States”, the defense asserts.

The article TFS-ICAP’s former Global Head of Emerging Markets broking claims against CFTC complaint appeared first on FinanceFeeds.
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The CFTC alleges that, at 2015, on at least one event, Woolfenden explicitly led a TFS-ICAP broker to ‘never admit that speeds have flown. ’ That allegation, according to the shield, is conspicuously silent as to whether the alleged flying had anything to do with the usa or whether Mr. Woolfenden’s statement was led to america. Additionally, even if the statement were somehow joined to the United States, a singular act like that would not be sufficient – even in combination with another generalized allegations – to warrant personal jurisdiction over Mr. Woolfenden.

Let’s remember that, as stated by the CFTC, the New York Southern District Court has jurisdiction over Mr Woolfenden because the underlying misconduct was caused by his actions at issue flying & print transactions. TFS-ICAP brokers made misrepresentations to US-based customers since they were educated and encouraged to do this by Mr Woolfenden. Even though Mr. Woolfenden lived in London, as the Global Head of Emerging Markets FX Options he immediately supervised and managed these US- and – London-based agents through at least mid-August 2015. Moreover, he enrolled with the CFTC as an associated person of 2 CFTC-registered entities at the United State.

In the latest filing with the New York Southern District Court, the defense counsel for Mr Woolfenden claims it is unfair and unreasonable to induce Mr. Woolfenden, who’s from work in the uk, to undergo years of expensive and baffling overseas litigation in the United States – an forum where he’s virtually no ties.

US authorities cast wider net in fight against binary options fraudsters

Sourced from: https://financefeeds.com/us-authorities-cast-wider-net-fight-binary-options-fraudsters/

Whereas the start of the trial against Lee Elbaz, the former CEO of Yukom Communications — provider of investor”retention” services for BinaryBook and BigOption, approaches, the amount of criminal cases related to these proceedings continues to grow.

The United States Department of Justice (DOJ) has released an update regarding Lee Elbaz’s case which continues in the Maryland District Court. Two additional associated cases have been registered in the District of Maryland. Both cases are pending before U.S. District Judge Theodore D. Chuang.

You can find at least three other cases related to the lawsuit against Lee Elbaz. Sentencing for defendant Mel was scheduled for June 17, 2019, at 2:00 PM. The situation against her proceeds in the Maryland District Court.
FinanceFeeds has got Court advice about Hadar along with Smith.

Lissa Mel was charged on November 16, 2018 by criminal information with one count of conspiracy to commit wire fraud. She had been formerly charged by complaint on September 13, 2018.
Arraignment was scheduled for March 14, 2019 at 9:30 am.
FinanceFeeds –

Arraignment has been scheduled for March 21, 2019 at 9:00 am.
From in or about November 2014 during or about August 2016, Hadar functioned as a sales agent for BigOption in Yukom.
From in or about August 2015 during or about January 2016, Smith worked as a sales agent or supervised BinaryBook agents at Numaris Communications. The latter was an Israel-based company that supplied sales and advertising services, including retention solutions for BinaryBook. Numaris co-ordinated its work with Yukom. In correspondence and other communications, Smith identified himself as an ‘specialist trader’ along with ‘senior agent ’ for BinaryBook.
The article US authorities cast wider net in fight against binary choices fraudsters appeared initially on FinanceFeeds.
According to the charges, Hadar and Smith conspired to commit offenses against the USA, to wit and cable fraud by way of materially false and fraudulent pretenses, representations and guarantees.  This was the intention behind the conspiracy for Hadar along with Smith and other agents of Yukom, Numaris, BinaryBook, BigOption and other entities to get maximum deposit from investors and to take steps to make certain that investors lost money in their accounts — consequently making cash for themselves and their brands from the procedure.

Lissa Mel is the Israeli citizen who’s alleged to have participated in a conspiracy to commit wire fraud in connection with the sale and advertising of binary choices. The conspiracy concerns two binary choices brands — BinaryBook and BigOption. There are lots of types of misrepresentations made by representatives of these”brokers” to investors, including misrepresentations regarding the suitability of binary choices because investments, as the deceptive use of”bonuses” and misrepresentations regarding the titles, location and qualification of agents”helping” traders. The Government has declared that this conspiracy resulted in more than 80 million in losses .

The criminal complaint from Lissa Mel, aka”Monica Sanders”, alleges she engaged in the conspiracy at least in or around May 2015 through at least May 2016.

Illinois Court nixes attempt by MtGox CEO Mark Karpeles to dismiss action against him

Sourced from: https://financefeeds.com/illinois-court-nixes-attempt-mtgox-ceo-mark-karpeles-dismiss-action/

In denying Karpeles’ motion to dismiss, Judge Gary Feinerman noticed that Greene and Motto’s contacts using the exchange weren’t arbitrary, isolated, or fortuitous, but rather the product of Mt. Gox’s virtual presence in Illinois, as some 7,056, roughly 1.5%, of the addresses associated with Mt. Gox balances originated from Illinois.
The case continues at the Illinois Northern District Court.

Karpeles has moved to dismiss the situation for lack of personal jurisdiction.
The plaintiffs in the case – Gregory Greene and Anthony Motto, seek on behalf of a putative class to maintain Mark Karpeles, Mt. Gox’s chief accountable for financial losses allegedly arising out of the market’s meltdown. The plaintiffs are attracting state law promises that noise in conversion/trespass into chattels, neglect, and fraud. Their complaint stated that Karpeles intentionally resisted the security and stability of the Mt. Gox market and his negligent or deliberate failures in operating and designing the trade enabled the loss of the plaintiffs’ assets. On behalf of a putative class, the plaintiffs seek actual, statutory, and punitive damages, along with prejudgment interest and attorney fees.

Though Karpeles didn’t himself create the alleged misrepresentations into Greene and Motto, it’s enough that he allegedly directed his agents to do this since the representatives had notice that the communications worried Mt. Gox’s business with folks in Illinois. Similarly, that Karpeles didn’t anticipate Mt. Gox to possess tens of thousands of Illinois accounts and didn’t care to determine the source of every deposit or communicating doesn’t deprive the connections together with Greene and Motto in Illinois of the jurisdictional significance.
The Court has found that, even if the Illinois market was”one of many”, an area of no specific interest , Karpeles purposefully availed himself of the market by running a market which created thousands of Illinois balances and by purporting to protect the resources of Greene, Motto, and the other Illinois users.

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The article Illinois Court nixes attempt by MtGox CEO Mark Karpeles to blow off activity against him appeared first on FinanceFeeds.

In sum, since he purposefully availed himself of the Illinois market through his deliberate and constant exploitation of that market, which in turn gave rise to Mt. Gox’s company together and communications to Greene and Motto at Illinois, Karpeles includes a constitutionally sufficient connection with Illinois to justify the exercise of specific jurisdiction.
In keeping with earlier reports, the Illinois Northern District Court has denied a motion to dismiss brought on by Mark Karpeles at a situation regarding the collapse of Bitcoin trade MtGox. The applicable Memorandum Opinion & Order was issued on March 12, 2019.

NY Court reschedules sentencing of Maksim Zaslavskiy in ICO fraud case

Sourced from: https://financefeeds.com/ny-court-reschedules-sentencing-maksim-zaslavskiy-ico-fraud-case/

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Moreover, Zaslavskiy falsely advertised that REcoin experienced a”team of attorneys, professionals, brokers and accountants” who’d invest the proceeds from the REcoin ICO into real estate, that 2.8 million REcoin tokens were sold (just about 1,000 investors paid for REcoin tokens) and the investment from Diamond tokens was”hedged by bodily diamonds.”
“Stripped of the 21st-century jargon,” the court said, referring to Zaslavskiy’s ICO advertising solicitations, the indictment explained a”scam, replete with shared characteristics of many financial frauds.” The court added,”just labeling a investment opportunity since’virtual money’ or’cryptocurrency’ doesn’t transform an investment contract–a collateral –right into a money,” and does not, therefore, eliminate the offerings from the ambit of securities law.

As he confessed at his guilty plea, Zaslavskiy fraudulently marketed RECoin as”The First newly Cryptocurrency Backed by Real Estate,” and subsequently touted Diamond within a”exclusive and tokenized membership pool” hedged by diamonds. In reality, Zaslavskiy purchased neither real estate nor diamonds, along with the certificates he delivered to investors weren’t backed by the promised blockchain technology.

The sentencing, initially scheduled for April 19, 2019, is rescheduled to May 20, 2019.
The post NY Court reschedules sentencing of Maksim Zaslavskiy at ICO fraud case appeared first on FinanceFeeds.

Earlier in 2018, United States District Court Judge Raymond J. Dearie refused Zaslavskiy’s motion to dismiss the indictment. Zaslavskiy claimed the securities legislation did not apply to cryptocurrency offerings. The court declared the validity of the laws, noting that”there can be no serious argument” the indictment was adequate. The court further held that a jury was not able to decide when REcoin and Diamond tokens were all securities. This is based on rulings in similar circumstances.
In addition to this criminal charges, the Securities and Exchange (SEC) has filed civil charges from Zaslavskiy. The civil case was stayed pending resolution of this criminal issue.
The sentencing of Maksim Zaslavskiy, that has pleaded guilty to conspiracy to commit securities fraud in relation to two Initial Coin Offerings (ICOs), has been adjourned. An executive order filed with the New York Eastern District Court on Tuesday, March 12, 2019, grants the petition  issued with the defendant’s counselor about rescheduling the Legislation as a result of personal issues.

Sentencing of Maksim Zaslavskiy may be adjourned

Sourced from: https://financefeeds.com/sentencing-maksim-zaslavskiy-may-adjourned/

As he confessed at his guilty plea, Zaslavskiy fraudulently marketed RECoin as”The First newly Cryptocurrency Backed by Real Estate,” and subsequently touted Diamond within a”exclusive and tokenized membership pool” hedged with diamonds. In fact, Zaslavskiy purchased neither real estate diamonds, along with the certifications he sent to investors weren’t backed by the guaranteed blockchain technology.
“Stripped of the 21st-century jargon,” the court said, referring to Zaslavskiy’s ICO advertising solicitations, ” the indictment explained a”scam, replete with shared characteristics of many financial frauds.” The court added,”just labeling a investment opportunity as’virtual currency’ or’cryptocurrency’ doesn’t change an investment contract–a collateral –right into a currency,” and doesn’t, therefore, remove the offerings out of the ambit of securities law.
On Monday, March 11, 2019, the counselor for Zaslavskiy submitted a request for rescheduling the sentencing due to personal issues. The sentencing in the case is now scheduled for April 19, 2019. The planned new date for the Legislation will be May 20, 2019.

Sentencing of Maksim Zaslavskiy, who has pleaded guilty to conspiracy to commit securities fraud in connection with two Initial Coin Offerings (ICOs), could be adjourned. This is signaled by the most recent filings from the criminal case against him in the New York Eastern District Court.

Before in 2018, United States District Court Judge Raymond J. Dearie denied Zaslavskiy’s motion to dismiss the indictment. Zaslavskiy asserted the securities legislation did not apply to cryptocurrency offerings. The court upheld the validity of these laws, noting that”there can be no serious debate” the indictment was adequate. The court further held that a jury was entitled to determine if REcoin and Diamond tokens were securities. This is based on rulings in similar instances.
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Zaslavskiy faces up to five years’ imprisonment. In addition to the criminal penalties, the Securities and Exchange (SEC) has filed civil charges from Zaslavskiy. The civil case was stayed pending resolution of the criminal issue.

The article Sentencing of Maksim Zaslavskiy could be adjourned appeared first on FinanceFeeds.

Moreover, Zaslavskiy falsely advertised that REcoin experienced a”group of lawyers, professionals, brokers and accountants” who would invest the proceeds from the REcoin ICO into real estate, which 2.8 million REcoin exemptions were sold (just about 1,000 investors compensated for REcoin tokens) and the investment in Diamond tokens was”hedged by actual diamonds.”