Financial regulators from the United States and Canada have shut down the Toronto-based prop trading firm My Forex Funds (doing business at myforexfunds.com), accusing the business and its owner, Murtuza Kazmi, of defrauding retail traders out of more than $300 million.
The following notice is now posted on the business’ website:
We discovered that orders were issued prohibiting us from trading securities or getting access to money in our bank accounts by the Canadian provincial securities regulator and the American commodities regulator without any prior warning or discussion.
Our business is essentially, or at least temporarily, frozen as well, unless these freeze orders are lifted or changed.
We will be contacting the regulators to hear about their concerns, and the first court date to decide whether the freezing orders should be removed or amended is now set for September 11 in the US, with a second hearing later that same week in Canada.
Meanwhile, Murtuza Kazmi, formerly of Phillipsburg, New Jersey, and his businesses, Traders Global Group Inc., a New Jersey corporation, and Traders Global Group Inc., a Canadian business organization, are all doing business as “My Forex Funds,” according to a complaint that the U.S. derivatives markets regulator, The Commodity Futures Trading Commission (CFTC), has filed in the U.S. District Court for the District of New Jersey.
They are accused of defrauding consumers by enticing them to engage in leveraged, margined, or financed retail foreign exchange (retail fx) and leveraged retail commodities transactions, according to the complaint.
On August 29, U.S. District Court Judge Robert B. Kugler issued a statutory restraining order that included the following provisions: freezing the defendants’ assets; requesting that the CFTC inspect the defendants’ books and records; and appointing a temporary receiver. On September 11 in Trenton, New Jersey, Judge Zahid N. Quraishi will hold a hearing on the CFTC’s request for a preliminary injunction.
In its ongoing legal action, the CFTC is pursuing civil monetary penalties, disgorgement of illegally obtained gains, restitution to investors who were defrauded, permanent trading and registration bans, and an injunction against further violations of the Commodity Exchange Act (CEA).
“Director of Enforcement Ian McGinley said that the CFTC’s case against the “My Forex Funds” defendants “is emblematic of our commitment to stamp out retail fraud in our markets.”
Background Information on My Forex Funds
The defendants, operating under the name “My Forex Funds,” are accused of giving retail consumers the chance to become “professional traders” by utilizing Traders Global’s funds to compete with other “liquidity providers” and splitting any trading proceeds. Customers were given the assurance that “we only succeed when you succeed” and that “your success is our business.” However, in practice, Traders Global—and not a different “liquidity provider”—is the party to the majority of client deals.
According to the lawsuit, Traders Global’s sales pitch was effective because, since November 2021, more than 135,000 consumers have joined their trading programme and paid a total of $310 million in fees. The complaint claims that Kazmi transferred tens of millions of dollars to his personal accounts and used the money from the crime to buy opulent residences and cars.
The complaint claims that Traders Global actively reduces the likelihood that customers will trade profitably by using pretexts to terminate customer accounts, deceptively assessing commissions that lower customer account equity, covertly employing specialized software to cause customer orders to be executed at worse prices than appeared to the customer at the time an order was sent, and hindering the extremely small number of successful customers to decrease customer traffic.
In my view as a trader, the idea of Prop Firms is a No-Go Zone for any FOREX trader, because you end up funding an account over and over without profitable returns.
This is not a finance advice. Strictly for Educational purposes.