Acting chairman Caroline Pham has criticised the CFTC’s inaction when concerns were raised about the commission’s handling of the Traders Global Group case.
In August 2023, the CFTC filed a complaint against Candadian FX broker Traders Group Global, also known as My Forex Funds, noting that CA$31.5 million had been transferred to an unidentified account belonging to CEO Murtuza Kazmi between December 2022 and April 2023. These funds were, in reality, tax payments to the Canadian tax authorities.
This week the case was dismissed, with the court’s report stating: “The CFTC, as one of the primary prudential regulators in the United States, has an obligation to discharge all of its obligations – statutory, regulatory, and ethical – faithfully. It also unquestionably has a duty of candour to the Court. However, at almost every stage in this case, the CFTC failed in this regard.”
On the announcement Pham said: “The CFTC engaged in willful and bad faith conduct by making multiple false statements to the Court and other ‘numerous instances of sanctionable behavior’ over the course of a year. This is inexcusable.”
She went on to criticise previous CFTC management, stating: “I first raised numerous concerns about CFTC conduct in this case nearly two years ago – even before the complaint was filed, and again during the litigation when I reviewed CFTC emails evidencing management efforts to conceal the false statements from the Court.
“The CFTC not only disregarded my serious concerns and an oversight letter from a member of Congress, but also engaged in a malicious campaign of retaliation and defamation designed to impugn my character and integrity.”
Pham drew attention to recent changes she has made in the Division of Enforcement since being appointed acting chairman in January, including the introduction of public guidelines to encourage self reporting, new policies to reduce regulation by prosecution, and a redistribution of resources to tackle more serious cases.
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“I also want to commend our new Director of Enforcement, Brian Young, for taking immediate and proactive steps to promote an ethical culture and enhance continuing education and training opportunities for our enforcement staff to make sure this conduct never happens again, and the CFTC adheres to the highest standards,” Pham added.
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“The CFTC must now accept accountability so that appropriate corrective action can finally be taken to address the conduct issues, and the CFTC can put this behind us and move forward to restore the agency’s credibility and reputation.”
