On Sept. 1, the Commodity Futures Trading Commission announced it had filed a complaint against “My Forex Funds” for fraudulently soliciting customers more than $300 million to become “professional traders.”
The complaint, filed in U.S. District Court for the District of New Jersey, alleges that Murtuza Kazmi, formerly of Phillipsburg, New Jersey, and his companies, Traders Global Group Inc., in New Jersey and Traders Global Group Inc, in Canada, all doing business as “My Forex Funds”, fraudulently solicited customers to trade leveraged, margined, or financed retail foreign exchange (retail forex), and leveraged retail commodity transactions.
According to the commission, “My Forex Funds” supposedly offered retail customers the opportunity to become “professional traders” using Traders Global’s money to trade against third-party “liquidity providers” and share in any profits. The company assured customers that it was interested only in making customers money, but in reality was the counterparty to almost all of its customers trades.
The complaint also alleges that Traders Global minimized the likelihood that customers could make a profit off the trades by using pretexts to terminate customer accounts, misleading assessing commissions to reduce its customer’s account equity, and secretly using specialized software that caused orders to be executed at prices lower than what appeared to the customer at the time the order was sent. The commission also alleges that the company handicapped some successful customers to decrease profits and increase their losses.
The Commission said that since 2021, more than 135,000 customer signed up for the trading program paying at least $310 million in fees. Kazmi used those proceeds to purchase luxury homes and automobiles, officials allege, after transferring tens of millions of dollars to his personal accounts.
U.S. District Court Judge Robert B. Kugler signed a statutory restraining order to freeze the defendant’s assets, and required them to submit their books and records over for examination by the CFTC. Judge Kugler also appointed a temporary receiver in the case. A hearing on CFTC’s motion for preliminary injunction before Judge Zahid N. Quraishi in Trenton, N.J. for Sept. 11. The commission is seeking restitution to defrauded investors, disgorgement of all ill-gotten gains, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against future violations of the Commodity Exchange Act.
“The CFTC’s case against the ‘My Forex Funds’ defendants is emblematic of our commitment to stamping out retail fraud in our markets,” said Director of Enforcement Ian McGinley. “Anyone offering or entering into leveraged retail forex contracts without registration, or offering or entering into leveraged retail commodity contracts off-exchange, is acting in clear violation of the law.”