The Commodity Futures Trading Commission (CFTC) has unveiled a significant case against Murtuza Kazmi, a New Jersey resident, and his enterprises, Traders Global Group Inc. both in the U.S. and Canada. Operating under the name “My Forex Funds,” they stand accused of deceptively enticing customers into leveraged foreign exchange and retail commodity trading.
Key highlights:
Restraining Measures: A statutory order has been enforced, freezing assets linked to the defendants. This order also mandates the defendants to open their books for CFTC scrutiny and has placed them under a temporary receiver’s oversight.
Upcoming Hearing: A hearing on the injunction, set for September 11, will determine further action.
CFTC’s Motive: The agency is aiming for restitution for the defrauded investors and seeks penalties and bans against the involved parties for breaching the Commodity Exchange Act (CEA). Ian McGinley, Director of Enforcement, underscored the CFTC’s dedication to eradicating retail market fraud, warning against the illicit offering or participation in leveraged retail contracts.
The Deception: “My Forex Funds” allegedly promised customers lucrative opportunities as “professional traders,” ensuring them that the company’s success was intertwined with the customers. Contrary to their claims, the company itself, rather than third-party “liquidity providers”, was essentially the counterparty in almost all customer trades. Furthermore, the company is said to have employed various tactics to reduce the chances of customer profitability, including unjust account terminations and the usage of specialized software to manipulate trade executions.
Magnitude of Fraud: Since November 2021, over 135,000 customers reportedly joined their trading program, shelling out more than $310 million in fees. The money seems to have been lavishly spent on luxury properties and cars by Kazmi, with massive amounts funneled into his personal accounts.
International Response: On a related note, the Ontario Securities Commission has clamped down on Traders Global Group Inc. and Kazmi, barring all trading activities related to them. The support from the Ontario Securities Commission in this matter has been acknowledged by the CFTC.
The CFTC took this opportunity to remind the public of its customer protection advisories. Stressing on the importance of company verification before any financial commitments, they urged potential customers to be cautious with unregistered entities.
In conclusion, this case highlights the importance of vigilance in the financial sector. The CFTC encourages individuals to promptly report any suspicious activities related to commodity trading.
