FXCM Inc Gets Creative on Negative Balance Settlements

FXCM reaches an agreement with a client over negative balances, involving issuing options. According to an 8-K filing with the U.S. Securities and Exchange Commission, last Thursday on April 15th, 2015, FXCM, Inc. (NYSE: FXCM) entered into an Option Agreement, issuing an option to purchase 569,344 shares of the brokerage’s Class A Common Stock for a purchase price of $550,000.

The exercise price per share of Class A Common Stock issuable pursuant to the Option is $2.25. The Option is exercisable immediately, and will expire in two years from the date of issuance. The contract includes standard anti-dilution protections.

The move by FXCM is part of a negative equity balance Settlement with a customer of the brokerage. After suffering substantial losses in the aftermath of the Swiss franc debacle on January 15, the company has announced it will forgive 90% of negative balances. Now it seems the broker is resorting to creative ways to settle negative balances with the remaining 10%.