March 6 (Bloomberg) -- Currency trader FXCM Inc. said it bought part of high-speed trading firm Infinium Capital Holdings LLC, which former employees sued claiming they invested in the company without realizing its finances were deteriorating.
FXCM disclosed the deal in a statement today announcing its fourth-quarter financial results. Reuters reported that FXCM and a subsidiary purchased five trading desks and will take on 48 employees, while the rest of Infinium is being shut, citing an interview with Infinium President Mark Palchak, who didn’t respond to an e-mail or phone call from Bloomberg News.
Diminished volatility in markets around the world has driven down profits at trading firms such as Chicago-based Infinium, which use computers to make decisions to buy and sell in fractions of a second. Former Infinium traders sued the firm in January, saying they were duped into investing in the company without realizing its true financial condition. Financial data included in their lawsuit showed a loss of $6.6 million for 2012 and a $6.1 million deficit for the first half of 2013.
FXCM spokeswoman Jaclyn Klein didn’t comment beyond the company’s earnings release.
The purchase price includes about $11.9 million that Infinium owed FXCM, according to today’s press release. FXCM owns a 50.1 percent stake in the acquired Infinium operations, which were consolidated into a new unit called V3 Markets, while FXCM subsidiary Lucid Markets Trading Ltd. has the rest.
“We are in the early stages of clearly rebuilding a business that is in need of a greater degree of risk supervision than it had in its prior life,” FXCM Chief Executive Officer Drew Niv said during a conference call today.
To contact the editor responsible for this story: Nick Baker at firstname.lastname@example.org