GAIN Capital Acquires Patent and Software Properties, CySec Warns of Bogus FX Firm

GAIN Capital acquired patent and software assets from Valaquenta and Forexster via its subsidiary GTX Bermuda on July 10, a SEC filing shows. The company paid $12.4 million to Valaquenta Intellectual Properties for a patent granted in 2003.

To enable it to acquire Forexster, GAIN issued a total of 861,935 in common shares. When GAIN Capital rolled out its GTX ECN software in 2010, it designed it using the technology of the Bermuda-based Forexster.

Forexster was established by Arman Glodjo, a former executive at Valaquenta Capital hedge fund, in 2001.Through the transaction, GAIN Capital obtain additional exclusive usage rights of the software and the Valaquenta Intellectual Properties patent for Forex trading, as well as non-exclusive rights for transacting financial instruments linked to hydrocarbons, precious metals and commodities.

Meanwhile, the patent acquired is for an international electronic trading system that was invented by Mr. Glodjo, Nathan Bronson and Scot Harrington. In 2001, Glodjo and another partner Campbell Harvey developed software that linked clients with other clients in the forex market just like a peer-to-peer network.

GTX Bermuda, in its deal with Valaquenta, will pay a further contingent payment should GTX Bermuda or related partners give its customers the tools to deal in new categories of financial instruments whilst using the acquired patent, though this will depend if a certain undisclosed net revenue level is attained.

In a separate report, CySec, Cyprus financial markets watchdog, warned the public against dealing with an online retail foreign exchange firm named Forextradition Ltd. It said that the company isn’t allowed, registered and authorized by CySec to provide investment and such related services in Cyprus.