CFTC ordered to pay $3.1 million legal tab in My Forex Funds case

A federal judge in Camden, New Jersey, on Monday awarded more than $3.1 million in attorney fees to a U.S.-Canadian trading firm after finding that the U.S. Commodity Futures Trading Commission engaged in litigation misconduct.

The fee award from U.S. District Judge Edward Kiel builds on his finding from May that the CFTC "acted willfully and in bad faith on several occasions" in pursuing a lawsuit against Traders Global Group, also known as My Forex Funds.

Lawyers for Traders Global did not immediately respond to a request for comment, nor did a spokesperson for the CFTC.

The CFTC did not object to the fees sought by Traders Global, which will cover its legal costs from seeking sanctions against the agency. Acting CFTC Chairman Caroline Pham previously said that the agency's conduct in the litigation was "inexcusable."

The CFTC accused My Forex Funds and its CEO Murtuza Kazmi in 2023 of fraudulently booking at least $310 million in fees from thousands of customers. The agency said My Forex Funds illicitly transferred C$31.5 million to an unidentified account outside the United States, leading a U.S. judge to freeze the assets of both Kazmi and My Forex Funds.

But CFTC employees received an email before the case was filed from the Ontario Securities Commission confirming the transfers were legitimate tax payments to Canadian authorities, a court-appointed special master in the case found.

Despite possessing the email, the CFTC proceeded with the lawsuit and alleged that the C$31.5 million transfers were evidence that Kazmi "may — and is likely to — transfer or dissipate" his assets.

The CFTC did not disclose the email until four months after bringing its case, and only then in a footnote in a court filing, the special master's report said.

Traders Global and Kazmi were represented by a team of attorneys from Quinn Emanuel Urquhart & Sullivan and King & Spalding. Quinn Emanuel charged more than $2.2 million for 1,511 hours of work relating to Traders Global's sanctions request, while King & Spalding charged $469,109 for 406 hours of work, according to Kiel.

Quinn Emanuel partner Robert Zink charged the highest rate on Traders Global's legal team, billing $1,810 an hour.