Jefferies Mulls Recovering Investments in FXCM: SEC Filing

<p>The investment banking and financial services firm, Jefferies filed its financial report for the three-month and six-month periods that ended on May 31 with the Securities and Exchange Commission (SEC). The report, which was submitted
on July 7, revealed a tussle between the group and <a href="https://www.financemagnates.com/tag/global-brokerage/" target="_blank" rel="follow">Global Brokerage
Inc.</a> over the ownership of FXCM.</p><p><a href="https://www.financemagnates.com/tag/fxcm/" target="_blank" rel="follow">FXCM</a>, also known as Forex
Capital Markets, is a retail foreign <a href="https://www.financemagnates.com/terms/e/exchange/">exchange</a> brokerage company that is based
in New York. In March, the creditors of Global Brokerage filed an
involuntary bankruptcy petition against a subsidiary business owned by the
broker, Global Brokerage Holdings LLC, which owns 50% of the voting shares of FXCM.</p><p>Jefferies' $35 Million Loan</p><p>Jefferies is planning to
petition the <a href="https://www.financemagnates.com/terms/b/bankruptcy/">bankruptcy</a> court to be allowed to recover the funds invested in
FXCM, Friday's report stated. FXCM owed Jefferies $35 million as of May 31,
which was extended to the broker as a secured loan facility.</p><p>Besides that, Jefferies
disclosed that it owned 50% of the voting
rights in FXCM and had significant influence on the decision of the company due to its members on the Board of Directors. Additionally, the company
contributed $5 million and $10 million, respectively, during the three-month and six-month period which ended on May 31, 2023.</p><p>"We have an equity
interest in FXCM, which was worth $46.6 million as of May 31, 2023, and $59.7
million as of November 30, 2022. It consists of a 50% voting interest in FXCM
and a right to a majority of all the distributions of the equity of FXCM,"
Jefferies explained in the <a href="https://d18rn0p25nwr6d.cloudfront.net/CIK-0000096223/e0ef0725-a639-435c-b7f6-4f393f24be15.pdf" target="_blank" rel="follow">report</a>.</p><p>Jefferies’ Stake in FXCM</p><p>Furthermore, according
to the details, all the equity held by Global Brokerage is pledged as a security
to the debt that Jefferies extended to FXCM. In light of this, Jefferies
believes that if it manages to recover all of the assets pledged as a security, it would have full ownership of FXCM.</p><p><a href="https://www.financemagnates.com/forex/jefferies-looked-at-828m-max-loss-exposure-from-fxcm-investment/" target="_blank" rel="follow">Finance
Magnates</a> reported in April that Jefferies had <a href="https://www.financemagnates.com/forex/jefferies-looked-at-828m-max-loss-exposure-from-fxcm-investment/" target="_blank" rel="follow">revealed
a loss exposure</a> worth
$80 million between December 2022 and February 2023 due to its investment in
FXCM. However, the investment bank said it had reduced its exposure from
more than $90 million in the previous month.</p>

This article was written by Jared Kirui at www.financemagnates.com.