CFTC Commissioner Calls for Action on Alleged Misconduct in My Forex Fund Case
Caroline D. Pham, a commissioner at the U.S. Commodity Futures Trading Commission (CFTC), has issued a statement calling for immediate action regarding alleged misconduct by CFTC staff in the enforcement case against Traders Global Group Inc., the operator of My Forex Funds.
In a statement released this week, Commissioner Pham expressed serious concerns about the Rule 11 sanctions motion filed in the CFTC vs. Traders Global Group case, which reportedly alleges that CFTC staff made false representations to the court over a six-month period.
Pham stated, "This is an extremely serious matter, and our Commission will be subject to intense scrutiny for how we handle the alleged misconduct of CFTC staff. Such behavior cannot be tolerated by a law enforcement agency."
For My Forex Funds, this could be a turning point in the case that has been ongoing since September last year. The prop trading firm has consistently maintained that the Commission may have misinterpreted some of its payments, leading to the freezing of its assets.
Furthermore, in November last year, MFF distanced itself from the Commission's allegations and questioned the CFTC's jurisdiction over its business, arguing that transactions between MFF and its clients were outside the regulatory scope.
In early March this year, according to foreign media Finance Magnates, representatives of the prop firm sought to impose sanctions on the CFTC for alleged misrepresentation of facts.
The company cited a court order highlighting the Securities and Exchange Commission's (SEC) "egregious abuse of power" in handling the DEBT Box case, drawing parallels with the CFTC's misrepresentation of facts and "maliciously acting staff."
A motion filed in a New Jersey court stated: "While sanctions are an extraordinary measure, they are necessary here to condemn and correct the CFTC's egregious abuse of ex parte procedures and its power as a government enforcement agency."
The motion calls for an "evidentiary hearing to fully understand and rectify the CFTC's pattern of misconduct and its impact on the defendants' rights."
Commissioner's Allegations Against CFTC in the My Forex Funds Case
Commissioner Pham proposed several recommendations to address the situation:
- Reassign the case to CFTC enforcement staff from other regional offices or headquarters
- Have the CFTC Office of General Counsel or the U.S. Department of Justice handle the Rule 11 sanctions motion, rather than the Division of Enforcement
The commissioner expressed shock that these steps had not yet been taken, noting that it took six months for the Commission to learn of the court's admonishment of CFTC's conduct in this case.
Pham also raised broader concerns about CFTC's internal procedures, stating she had previously uncovered instances where the Division of Enforcement was "dishonest with the Commission in enforcement action recommendations, including omitting evidence and legal arguments."
She declared: "It is unacceptable to 'hide the ball' from the Commission, especially to obtain rubber-stamp approval to force the public into settlement agreements that deprive Americans of their constitutional rights and property."
The commissioner called for a culture change and increased transparency at the CFTC, stating: "Sunlight is the best disinfectant."
Key Points of CFTC Misconduct Disrupting My Forex Funds Investigation
In brief, the CFTC demonstrated a degree of misconduct in its lawsuit against MFF, including withholding information and offending the involved parties. Essentially, a fair trial was not provided.
- CFTC Commissioner Pham exposes staff misconduct in the My Forex Funds case, including false representations to the court
- My Forex Funds may gain a turning point, as the company has consistently questioned CFTC's allegations and jurisdiction
- Pham recommends reassigning case handlers and having higher-level units handle the sanctions motion
- Pham points out broader issues within the CFTC, including dishonesty from the enforcement division to the Commission
- Calls for cultural reform and increased transparency at the CFTC to address these issues
Reference：My Forex Funds Investigation Rattled by CFTC Commissioner Exposing Staff Misconduct
