Exclusive: GAIN Capital total bill for FXCM US client purchase: $6.96 million


fxcm us assets gain capital

LeapRate Exclusive… LeapRate has learned via regulatory filings that the total amount paid by Forex.com parent company Gain Capital Holdings Inc (NYSE:GCAP) for the US clients of FXCM was $6.96 million.

Back in February, the FXCM operating unit of Global Brokerage Inc (NASDAQ:GLBR) was forced into a quick fire-sale of its US operations, after the company and its then-CEO Drew Niv and co-founder William Ahdout were banned from the US Forex market, following settlement of allegations that FXCM defrauded its customers over the course of several years as to the nature of its market making activities.

Forex.com swooped in and quickly arranged to acquire FXCM’s more than $140 million of US client assets, paying nothing up front based on the following formula:

  • $500 per account for each transferred account that first executes a new trade with Forex.com during the 76-day period immediately following the closing of the account transfer; and
  • $250 per account for each transferred account that did not execute a new trade with Forex.com during the Initial Period, but does execute a new trade during the 77 following days.

By the end of Q1 (about eight weeks after the transfer), Forex.com had paid FXCM $5.1 million. Now we have discovered in regulatory filings that the amount paid to FXCM by the end of Q2 totaled $6.96 million.

That number might move up slightly in Q3, as the full 77 day period in which Forex.com would pay $250 for each new account which trades was not up until July 13. However, that probably numbers just a few accounts.

The acquired FXCM accounts at what can only be described as a bargain price helped drive GAIN Capital’s Q2 results. Revenues for Q2 at GAIN Capital increased by 65% over Q1 to $98.1 million, with the company’s retail FX unit Forex.com reporting Revenues of $79.1 million in Q2 – more than double Q1’s $38.9 million.

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Exclusive: GAIN Capital total bill for FXCM US client purchase: $6.96 million

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