The prop firm claims that an email submitted by the regulator to court proves they "knowingly included false information."
Finance Magnates reached out to the CFTC but hasn't received any comment.
My Forex Funds' lawyers couldn't believe their eyes. A minute detail in a recent court filing by the Commodity Futures Trading Commission (CFTC) led them to allege that the regulator was aware of its mischaracterization of the payments in the initial allegations against the prop trading firm and its CEO, Murtaza Kazmi. The mischaracterization led to a court order to freeze the assets of both the company and its CEO, which has now been changed by the court.
On Tuesday, the prop trading firm filed a motion highlighting that the CFTC "knowingly included false information in the initial ex parte application for a statutory restraining order (STO)."
"The Court should send a strong message to condemn and deter such conduct by a government agency," the defendants' legal representatives, led by Rob Zink and Avi Perry of Quinn Emanuel Urquhart & Sullivan, LLP, added. Further, the prop trading firm is seeking half the cost of the receivership from the CFTC. According to the defendants' lawyer, the CFTC have to pay half of the cost incurred for receivership as they obtained the STO through false statements.
The Mischaracterization of Tax Payments
The CFTC initially charged My Forex Funds and its CEO with fraud on August 28 and obtained a court order to freeze the company's and the individual's assets. The allegations included that the company illegally transferred funds to Kazmi's personal accounts.
The defendant's lawyers challenged the findings of the CFTC in late September, saying that the agency "recklessly mischaracterized transfers to and from Defendants' bank accounts before the SRO was entered." It was specific to CA$31.5 million, which was, according to My Forex Funds, transferred to the Canadian tax authorities.
In the consecutive court order, the judge accepted the evidence provided by the prop firm and unfrozen Kazmi's assets, leaving only about $12 million frozen after a recalculation. However, the court accepted the primary fraud evidence submitted by the CFTC against My Forex Funds and its CEO on Prima Facie (first look) basis. Earlier, lawyers of My Forex Funds moved to drop the fraud charges, but the court denied its request.
Although the CFTC stressed that its investigator came to know about the mischaracterization of payments after the filing of the SRO, an email exhibit attached by the agency itself in its court filing last week shows that a Canadian regulatory representative confirmed on August 17, before the initial lawsuit was filed, that the CA$31.5 million was indeed paid to the tax authorities.
My Forex Funds Attacks the Regulator
"Until the CFTC's latest filing, the Court and Defendants were under the misimpression that the CFTC only learned of the errors in Mr. [Matthew] Edelstein's [the investigator] declaration after the complaint and initial SRO application were filed," MFF stated in the motion.
"Although this fact was relegated to a footnote in the CFTC's filing (which itself is troubling and inconsistent with the standards expected of federal government counsel) and characterized by the CFTC as 'immaterial'…, the CFTC now concedes that 'the OSC emailed Mr. Edelstein shortly before the filing of the declaration that the transfer was comprised of tax payments'."
The defendant's motion further pointed out that the email from the Canadian authorities was received by the CFTC's lead counsel of the case. Ashley Burden is the Senior Trial Attorney of the CFTC handling the lawsuit against the prop trading firm.
"It knowingly submitted a false declaration to the Court in support of an application to freeze all of Defendants' assets and to impose a costly receivership on Defendants," the defendant's lawyer stated.
Finance Magnates reached out to the CFTC but hasn't received any comment as of press time.
My Forex Funds' lawyers couldn't believe their eyes. A minute detail in a recent court filing by the Commodity Futures Trading Commission (CFTC) led them to allege that the regulator was aware of its mischaracterization of the payments in the initial allegations against the prop trading firm and its CEO, Murtaza Kazmi. The mischaracterization led to a court order to freeze the assets of both the company and its CEO, which has now been changed by the court.
On Tuesday, the prop trading firm filed a motion highlighting that the CFTC "knowingly included false information in the initial ex parte application for a statutory restraining order (STO)."
"The Court should send a strong message to condemn and deter such conduct by a government agency," the defendants' legal representatives, led by Rob Zink and Avi Perry of Quinn Emanuel Urquhart & Sullivan, LLP, added. Further, the prop trading firm is seeking half the cost of the receivership from the CFTC. According to the defendants' lawyer, the CFTC have to pay half of the cost incurred for receivership as they obtained the STO through false statements.
The Mischaracterization of Tax Payments
The CFTC initially charged My Forex Funds and its CEO with fraud on August 28 and obtained a court order to freeze the company's and the individual's assets. The allegations included that the company illegally transferred funds to Kazmi's personal accounts.
The defendant's lawyers challenged the findings of the CFTC in late September, saying that the agency "recklessly mischaracterized transfers to and from Defendants' bank accounts before the SRO was entered." It was specific to CA$31.5 million, which was, according to My Forex Funds, transferred to the Canadian tax authorities.
In the consecutive court order, the judge accepted the evidence provided by the prop firm and unfrozen Kazmi's assets, leaving only about $12 million frozen after a recalculation. However, the court accepted the primary fraud evidence submitted by the CFTC against My Forex Funds and its CEO on Prima Facie (first look) basis. Earlier, lawyers of My Forex Funds moved to drop the fraud charges, but the court denied its request.
Although the CFTC stressed that its investigator came to know about the mischaracterization of payments after the filing of the SRO, an email exhibit attached by the agency itself in its court filing last week shows that a Canadian regulatory representative confirmed on August 17, before the initial lawsuit was filed, that the CA$31.5 million was indeed paid to the tax authorities.
My Forex Funds Attacks the Regulator
"Until the CFTC's latest filing, the Court and Defendants were under the misimpression that the CFTC only learned of the errors in Mr. [Matthew] Edelstein's [the investigator] declaration after the complaint and initial SRO application were filed," MFF stated in the motion.
"Although this fact was relegated to a footnote in the CFTC's filing (which itself is troubling and inconsistent with the standards expected of federal government counsel) and characterized by the CFTC as 'immaterial'…, the CFTC now concedes that 'the OSC emailed Mr. Edelstein shortly before the filing of the declaration that the transfer was comprised of tax payments'."
The defendant's motion further pointed out that the email from the Canadian authorities was received by the CFTC's lead counsel of the case. Ashley Burden is the Senior Trial Attorney of the CFTC handling the lawsuit against the prop trading firm.
"It knowingly submitted a false declaration to the Court in support of an application to freeze all of Defendants' assets and to impose a costly receivership on Defendants," the defendant's lawyer stated.
Finance Magnates reached out to the CFTC but hasn't received any comment as of press time.
Arnab is an electronics engineer-turned-financial editor. He entered the industry covering the cryptocurrency market for Finance Magnates and later expanded his reach to forex as well. He is passionate about the changing regulatory landscape on financial markets and keenly follows the disruptions in the industry with new-age technologies.
Capital.com Hits $1.2 Trillion in Client Trading Volumes, Sees 53% Surge
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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