Forex broker FXCM gets $300M lifeline from Leucadia

AP News
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Posted: Jan 16, 2015 5:45 PM

U.S. foreign-exchange broker FXCM is getting a $300 million lifeline after being hit with big losses from the impact of a change in Swiss currency policy.

New York-based FXCM's fate was temporarily in question after suffering a $225 million loss that it warned on Thursday might leave it in violation of regulatory capital requirements. The company said Friday that the $300 loan, from financial services company Leucadia National Corp., would let it "meet its regulatory-capital requirements and continue normal operations."

Trading had been halted Friday. When it resumed after the market close Friday, the stock slid 63 percent to $4.69 in extended trading. It traded above $17 as recently as Monday.

The Swiss National Bank shocked global markets Thursday when it announced that it was ditching its increasingly expensive policy of limiting the rise of its currency. The decision sent the Swiss franc — one of the world's most traded currencies— surging.

Some financial firms were unprepared for the unexpected change. At least two brokerage firms announced plans to go out of business as a result.

Leucadia National Corp.'s CEO Richard Handler said in a statement Friday that the deal is an attractive investment for Leucadia.