Quinn Emanuel Urquhart & Sullivan, LLP secured a momentous victory for Traders Global Group (d/b/a "My Forex Funds") and its founder Murtuza Kazmi in an enforcement action brought by the U.S. Commodity Futures Trading Commission ("CFTC"). Working alongside co-counsel King & Spalding, the firm achieved a rare rebuke of a federal law enforcement agency, as a federal court in CFTC v. Traders Global Group Inc., et al. sanctioned the CFTC, dismissed the case with prejudice, and awarded attorneys' fees.
The CFTC enforcement action against My Forex Funds and Mr. Kazmi commenced with an ex parte motion to freeze the defendants’ assets. The court initially ordered the freeze based in part on the CFTC's representations that Mr. Kazmi had improperly transferred substantial customer funds into a personal bank account outside the U.S. When the Quinn Emanuel team later exposed that the transfers in question were actually legitimate tax payments to Canadian authorities, the CFTC repeatedly declined to correct the record. Instead—in the court’s own words—the agency "took deliberate steps down a path of obfuscation and avoidance." These steps included knowing misrepresentations to the court during a preliminary injunction hearing, under oath during an evidentiary hearing, and in various court filings.
When the CFTC refused to take accountability for its misconduct, our team filed a motion for sanctions, arguing that "[while] sanctions are an extraordinary remedy, they are necessary here to condemn and redress the CFTC's serious abuse of the ex parte process and its authority as a government enforcement agency... By manufacturing a false justification for a total asset freeze and receivership, the CFTC caused irreparable harm to defendants, destroying overnight a business that took years to build and leaving Mr. Kazmi's family without material support for months." After extensive evidentiary hearings where CFTC staff were required to testify, Special Master Jose L. Linares concluded: "The CFTC, by virtue of its standing as a law enforcement arm of the United States government, is held to the highest standards, in particular when making an ex parte application to the Court. 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 candor to the Court. However, at almost every stage in this case, the CFTC failed in this regard."
U.S. District Judge Edward S. Kiel adopted the Special Master's recommendations in full, imposing sanctions on the CFTC, dismissing the complaint with prejudice, and awarding attorneys' fees. This victory underscores the firm's exceptional capabilities in enforcement defense, particularly in cases involving government overreach.
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If you have any questions about the issues addressed in this memorandum, or if you would like a copy of any of the materials mentioned in it, please do not hesitate to contact:
Robert Zink
Email: robertzink@quinnemanuel.com
Phone: 202-538-8338
Kurt Wolfe
Email: kurtwolfe@quinnemanuel.com
Phone: 202-538-8379
Avi Perry
Email: aviperry@quinnemanuel.com
Phone: 202-538-8330