Although no official confirmation had been provided by the time the weeklyFiX went to press, well-placed sources say that the 35% stake in FXCM owned by disgraced broker Refco was sold for a figure of around $60 million. Refco had paid a total of $42 million for the stake, which it purchased in 2002 (20%) and 2003 (15%).
If confirmed, the number would suggest that FXCM has faced a significant downturn in business over the past two years. The company itself tried to buy the stake back for $110 million after Refco imploded in late 2005. At the time, creditors rejected the price as too low. Since then, FXCM has changed its model and now it routes trades directly to its liquidity providers rather than acting as a principal. In the longer term, this model might well provide greater stability of earnings, For the moment, though, the price fetched must surely be disappointing.