http://www.marketwatch.com/story/fxc...tes-2012-11-12
By MarketWatch
U.K. market regulators have opened an investigation into trading practices at foreign exchange brokerage FXCM Inc. FXCM +2.15% , centered on exchange rates offered to clients, according to a person close to the firm.
The investigation by the U.K. Financial Services Authority began in September, according to a regulatory filing from FXCM, which said the focus was on "past trade execution practices."
"Although we are in the process of complying with the FSA's requests, we have not been formally notified whether or not the FSA intends to take any action against us with respect to our trade execution practices," representatives for FXCM wrote in the filing submitted Friday.
Shares in FXCM, which handles currency trading on behalf of institutional and retail investors, recently were down 1.2% at $9.02 Monday morning after giving up earlier gains.
The FSA investigation follows a similar probe by U.S. regulators in 2011, in which the Commodity Futures Trading Commission charged that FXCM failed to change the price a customer received on a currency transaction if an exchange rate became more profitable for the investor while a trade was in progress. However, according to the CFTC, FXCM did change the price if the rates shifted in FXCM's favor.
FXCM in August 2011 agreed to pay about $14.2 million to settle those charges.
In Friday's filing, FXCM estimated that its possible loss related to the FSA investigation and other claims or litigation could be up to $5 million, as of Sept. 30.
Last week FXCM reported third-quarter income rose 33% to $4.5 million on revenues of $114.9 million.
By MarketWatch
U.K. market regulators have opened an investigation into trading practices at foreign exchange brokerage FXCM Inc. FXCM +2.15% , centered on exchange rates offered to clients, according to a person close to the firm.
The investigation by the U.K. Financial Services Authority began in September, according to a regulatory filing from FXCM, which said the focus was on "past trade execution practices."
"Although we are in the process of complying with the FSA's requests, we have not been formally notified whether or not the FSA intends to take any action against us with respect to our trade execution practices," representatives for FXCM wrote in the filing submitted Friday.
Shares in FXCM, which handles currency trading on behalf of institutional and retail investors, recently were down 1.2% at $9.02 Monday morning after giving up earlier gains.
The FSA investigation follows a similar probe by U.S. regulators in 2011, in which the Commodity Futures Trading Commission charged that FXCM failed to change the price a customer received on a currency transaction if an exchange rate became more profitable for the investor while a trade was in progress. However, according to the CFTC, FXCM did change the price if the rates shifted in FXCM's favor.
FXCM in August 2011 agreed to pay about $14.2 million to settle those charges.
In Friday's filing, FXCM estimated that its possible loss related to the FSA investigation and other claims or litigation could be up to $5 million, as of Sept. 30.
Last week FXCM reported third-quarter income rose 33% to $4.5 million on revenues of $114.9 million.
