It appears that FXCM Inc (NYSE:FXCM) is using monetary enticements to encourage clients to make good on their negative balances.
In at least once instance, FXCM appears to have given away a large number of at-the-money options to an FXCM client who had a large negative equity balance, in return for that client repaying FXCM the negative equity balance.
On April 15, 2015, FXCM entered into an Option Agreement pursuant to which the Company issued an option to purchase 569,344 shares of the Company’s Class A Common Stock for a purchase price of $550,000, as reported by a filing with the US Securities and Exchange Commission.
The exercise price per share of Class A Common Stock issuable pursuant to the Option is $2.25.
FXCM has further stated that the option is exercisable immediately, expires two years from the date of issuance, and includes standard anti-dilution protections.
This particular agreement was entered into as part of negative equity balance settlement with a customer, in that should the customer settle the entirety of the negative equity that is outstanding.
The form of the option agreement that the Company may use from time to time in connection with similar settlements is attached hereto as Exhibit 4.1.
The Option was issued without registration in reliance on the exemption afforded by Section 4(a)(2) of the Securities Act as a transaction not involving a public offering.
The shares of Common Stock to be issued pursuant to the Option also will be issued in reliance upon such exemption.
For the official SEC filing, click here.