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Change of Heart: FXCM to Purchase Assets of Infinium Capital

FXCM, the US Forex broker, delivered a surprising piece of news last night: the company aims to acquire the assets of financially troubled Infinium Capital. According to a report by Reuters, the broker said it was in negotiations with the Chicago-based business to purchase its assets.

 

Why would we label FXCM's move a “change of heart”? The first reason is that in October 2013 the broker announced the purchase of a $12 million note in Infinium, indicating that it was not in a hurry to buy the high-speed trader itself. Moreover, FXCM's senior management has been adamant that the next big deal for the broker would be in the retail Forex sector, not in the institutional segment. 

 

However, given that FXCM recently beefed up its revolving credit facility and now sits on a greater cash pile than ever before, the company may pursue various strategic aims, including acquisitions in various segments. It's business: and all is fair in the Forex world. 

 

The push to buy the assets of Infinium happens amid a waterfall of problems at the firm. It's no secret to anyone that Chicago-based proprietary trading companies have been struggling over the past couple of years over tighter regulations and increased competition in the sector. For Infinium the problems have been grave, with the firm recording a loss of $6.6 million in 2012 and $6.1 million  between January 1, 2013 and July 31, 2013. More worryingly, Infinium's co-founders and other leading figures are now accused of defrauding 31 of the firm's employees to invest in the company which was meanwhile experiencing financial difficulties. 

 

FXCM said it had been aware of the lawsuit and that this would not change its plans regarding Infinium.

 

 

About FXCM Inc. 

 

FXCM Inc. (NYSE:FXCM) is a global online provider of foreign exchange, or FX, trading and related services to retail and institutional customers world-wide. 

 At the heart of FXCM's client offering is No Dealing Desk FX trading. Clients benefit from FXCM's large network of forex liquidity providers enabling FXCM to offer competitive spreads on major currency pairs. Clients have the advantage of mobile trading, one-click order execution and trading from real-time charts. FXCM's U.K. subsidiary, Forex Capital Markets Limited, offers Contract for Difference ("CFD") products with no re-quote trading and allows clients to trade oil, gold, silver and stock indices along with FX on one platform. In addition, FXCM offers educational courses on FX trading and provides free news and market research through DailyFX.com.

TAGS: fxcm  fxcm forex broker  fxcm us  us forex broker  fxcm infinium  infinium capital  forex acquisition  m&a  mergers and acquisitions  lawsuit  infinium troubles  institutional trading 

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