CFTC Staff on Leave Pending Investigation Amid Misconduct Allegations in My Forex Funds Case

The U.S. Commodity Futures Trading Commission (CFTC) has placed four lawyers and an investigator on administrative leave due to their alleged misconduct in a fraud case against online trading platform My Forex Funds, according to sources familiar with the matter.

The decision follows a sealed report from a special judge investigating alleged agency misconduct in the CFTC’s case against Traders Global Group Inc., the firm behind My Forex Funds. 

In a statement to Bloomberg, CFTC said,  “A report and recommendation has been filed on the Special Master’s review of allegations that CFTC enforcement attorneys and management engaged in numerous instances of willful and bad faith misconduct, including making false statements to the court. That report is currently under seal. Therefore, the CFTC has no further comment at this time.”

Separately, on Monday, the agency issued a general statement confirming that an unspecified number of employees had been placed on administrative leave while it investigated “potential violations of laws, government ethics requirements and professional rules of conduct.”  The statement did not reference My Forex Funds or name any individuals involved.

CFTC’s announcement issued on Monday

The CFTC initially filed suit against My Forex Funds and its chief executive officer, Murtuza Kazmi, in August 2023, accusing the firm of running a large-scale, Ponzi-like scheme. The complaint alleged that the firm amassed hundreds of millions in profits, with Kazmi allegedly purchasing a $1.6 million Lamborghini Aventador and acquiring a multimillion-dollar estate in Canada.

“Traders Global is a fraud,” the agency said at the time, alleging that the firm was not a third-party liquidity provider as it claimed, but rather the counterparty to “substantially all” customer trades. Kazmi and Traders Global refuted the allegations.

Later that month, a judge approved an asset freeze against Kazmi and My Forex Funds. However, a key element of the case came under scrutiny when an agency investigator indicated in a sworn statement that $31.5 million had been transferred to an account controlled by Kazmi. In reality, the funds had been paid to Canadian tax authorities.

In a December 2023 filing, the CFTC acknowledged the error, stating: “Counsel for the CFTC should have corrected this error, and regrets failing to do so.” In 2024, Traders Global called on the court to impose sanctions on the agency over the misstep.