After FXCM Inc was sued by a customer alleging violation of the Racketeer Influenced and Corrupt Organizations Act an investigation on behalf of investors in FXCM Inc (NYSE:FXCM) over possible violations of the federal securities laws by FXCM Inc. and certain of its directors and officers was announced.

The investigation by a law firm concerns on allegations that certain statements issued by FXCM Inc (Public, NYSE:FXCM) regarding its business, operations and financial performance were materially false and misleading. In early December 2010, FXCM sold more than 15 million shares at the price of $14 per share in its IPO. Shares of FXCM Inc (NYSE: FXCM) then rose on December 3, 2010 to $15 and then decreased on Dec 20 to as low as $12.21 per FXCM share.

Then on February 10, 2011, FXCM Inc disclosed that it was sued in the United States District Court for the Southern District of New York by a customer alleging claims under Federal and New York State law with respect to trading through the companys platforms
The plaintiff alleges that FXCM Inc has been engaged for years in a fraudulent scheme in violation of the Racketeer Influenced and Corrupt Organizations Act (RICO) that has bilked thousands of customers out of hundreds of millions of dollars, in part by using software designed to interfere with customers trades.

Equities research analyst William Katz at Citi Investment meanwhile cut earnings estimates for the Company for 2011 and 2012, and lowered the price target for the stock from $18 to $14. Katz wrote in a research note that the year-to-date data have raised questions about growth assumptions for the Company this year and next year, and begin to suggest potentially greater maturity in the business than previously contemplated.

After the announcements FXCM shares fell to under $12 and closed last Friday at $12.03 per share.