(Adds FXCM statement, paragraph 5)
NEW YORK Feb 13 FXCM Inc agreed to pay
a $650,000 civil fine to settle U.S. Commodity Futures Trading
Commission charges that the currencies broker was
undercapitalized in January 2015 and was too slow to report the
A consent order describing the settlement was filed on
Monday with the federal court in Manhattan and approved by U.S.
District Judge Katherine Forrest.
The settlement also resolved a claim that FXCM violated CFTC
rules by representing to customers that it would limit their
losses, through a policy of "zeroing out" negative balances.
FXCM did not admit or deny wrongdoing.
In a statement, FXCM said the settlement "brings to a close
all material U.S. regulatory matters" affecting its U.S. unit,
Forex Capital Markets LLC.
The settlement was disclosed one week after New York-based
FXCM said it intended to pull out of U.S. retail foreign
exchange, and sell its customer accounts to Gain Capital
That announcement accompanied a $7 million CFTC fine against
FXCM and founding partners Dror "Drew" Niv and William Ahdout to
resolve charges that over five years they concealed FXCM's close
ties to a market maker that received favored treatment.
FXCM, Niv and Ahdout were also barred from markets overseen
by the CFTC. (here)
Monday's settlement stemmed from the Swiss National Bank's
decision on Jan. 15, 2015 to eliminate a cap on the Swiss
franc's value relative to the euro.
That decision caused the euro to plunge, and led FXCM a day
later to report having lost more than $200 million as a result.
(Reporting by Jonathan Stempel in New York; Editing by Alan
Crosby and Phil Berlowitz)