Good point, @peterma. And that, sadly, goes for all sectors of the finance business, not just prop firms. They just happen to be the “flavour of the day” at the moment. We’ve had in the past, scammy off-shore brokers, illegal platform plug-ins, binary options, and on it goes.
Ultimately, the only way to fully protect the näive and their money is to ban these activities entirely. But what would that achieve? Just another innovative avenue opening up somewhere else. And why should the majority have to be penalised just because of the laziness of the few in checking what they are doing with their money!
The same principle operates throughout society. We enact laws and consequences to protect the public, and we install policing and justice institutions to enforce them. But what happens if, as so often happens, one cannot rely on the police services or courts of law. The same goes with regulating authorities in the finance sector.
As you say, one’s own due diligence is always necessary as far as it can go. But there will always be the cracks in the armour that let the arrows through.
I find these topics extremely depressing, but they are important and should be talked about on such forums wherever such vulnerable people gather. It is all the more important that posters remember that we here are all on the same side of the story - and there is no need for hostility amongst one’s own troops. There is more than enough of that on the “outside”!
Thanks for the post
PS: One additional thought. When one looks on the inside of the prop firm we also see them having to take precautions against being scammed themselves by their traders!! E.g. copy trading across accounts, using signals from external services, etc. Scamming is not, it seems, a one-way street!
if a company is under a “temporary receivership” that was ordered by a financial regulatory agency, is it common that this might be followed up with criminal charges?
ChatGPT RESPONSE:
The outcome of a company being placed under temporary receivership ordered by a financial regulatory agency does not automatically lead to criminal charges. Receivership is a legal process in which a receiver, appointed by a court or regulatory agency, takes control of a company’s assets and operations to protect the interests of creditors, investors, or the public. It is typically a civil procedure aimed at addressing financial or operational problems within the company.
Criminal charges, on the other hand, are typically brought by law enforcement agencies and prosecutors when there is evidence of criminal wrongdoing, such as fraud, embezzlement, money laundering, or other illegal activities that go beyond financial mismanagement or regulatory violations. While financial troubles or regulatory violations can sometimes be a sign of underlying criminal behavior, they are not the same thing, and each case is unique.
Whether criminal charges are pursued in addition to receivership depends on various factors, including the specific circumstances of the case, the evidence available, and the discretion of law enforcement and prosecutors. It is not uncommon for authorities to investigate a company under receivership to determine if any criminal activity has occurred, but the mere fact of being in receivership does not necessarily imply criminal charges will follow.
Ultimately, whether or not criminal charges are filed will depend on the findings of the investigation and whether there is sufficient evidence to support such charges. If you have concerns or questions about a specific case, it’s advisable to consult with legal counsel who can provide guidance based on the specific facts and circumstances involved.
the cftc(and canadian regulators also) has said that MFF was operating a retail trading brokerage without being licensed.
ps… ignorance is not a valid defense.
As a brief summary, the Commodity Futures Trading Commission (“CFTC”) filed a civil enforcement action in Federal District Court against the following Defendants: Traders Global Group Inc., a New Jersey corporation d/b/a My Forex Funds; Traders Global Group Inc., a Canadian business (collectively, “Traders Global”); and Murtuza Kazmi (collectively, the “Defendants”). The CFTC has alleged, among other things, that: (a) the Defendants entered into leveraged foreign exchange and commodity transactions with retail customers, and those transactions qualify as “retail forex transactions” and “retail commodity transactions”; (b) Traders Global has never been registered with the CFTC as a Registered Foreign Exchange Dealer and has never entered into any retail commodity transactions on an exchange registered with the CFTC; further, Traders Global has entered into, executed, and transacted in retail commodities not on any exchange registered with the CFTC; and (c) Defendants have made, with scienter, material misrepresentations and misstatements to customers and omitted material facts regarding Traders Global’s role as a counterparty to customers’ trades, the source and basis of any customer profits, and deceptive devices designed to reduce the likelihood and amount of profitable trading by a customer.
two minor updates for anyone following the thread (neither probably hugely significant, really) -
A US court yesterday granted My Forex Fund’s request in the lawsuit filed by the CFTC against them, and ordered the return of almost all the assets belonging to MFF’s founder and CEO, Murtuza Kazmi (about $100 Million), discharged the current temporary receiver and ruled against appointing a new one -
after this post our lovely moderators finally removed “myharrypooter” from the forum yet again (he’s back again, though, of course, and currently has at least two other active profiles here)
i would think they’re not too surprised and not too bothered and that they always ask initially for more than they expect to get?
the substantive points haven’t been ruled on, at all, yet
my guess (and we can only guess!) is that there will eventually be a settlement between MFF and the regulators, and MFF will “voluntarily” become regulated if they wish to retain ownership of the LP and be the counterparty
i still think they broke the law, myself, but i may be wrong
what matters is that whatever happens from here can only be good for the industry, good for future customers, and move some customers away from the mostly unmitigated horrors of CFDs toward the transparency and honesty of futures (it‘s already doing that, now) - a win/win/win, really?
