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 Global Brokerage Inc. over the ownership of FXCM.

FXCM, also known as Forex Capital Markets, is a retail foreign exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term 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.

Jefferies' $35 Million Loan

Jefferies is planning to petition the bankruptcy Bankruptcy Bankruptcy or insolvency constitutes a legal term and refers to being unable to repay debts. A business and a person can declare bankruptcy. When a person or company claims bankruptcy, it is described as a voluntary bankruptcy, and when your debtors force you into bankruptcy, it is referred to as involuntary. A voluntary bankruptcy occurs when the debtor or borrower, the party that owes the money files with the courts. Involuntary bankruptcy happens when your credits file a petition with the co Bankruptcy or insolvency constitutes a legal term and refers to being unable to repay debts. A business and a person can declare bankruptcy. When a person or company claims bankruptcy, it is described as a voluntary bankruptcy, and when your debtors force you into bankruptcy, it is referred to as involuntary. A voluntary bankruptcy occurs when the debtor or borrower, the party that owes the money files with the courts. Involuntary bankruptcy happens when your credits file a petition with the co Read this Term 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.

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.

"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 report.

Jefferies’ Stake in FXCM

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.

Finance Magnates reported in April that Jefferies had revealed a loss exposure 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.