MyForexFunds Vindicated as Courts in Two Nations Sanction Financial Regulators

TORONTO, ON – February 25, 2026 – In an unprecedented rebuke of a top Canadian financial regulator, the Ontario Superior Court of Justice has ordered the Ontario Securities Commission (OSC) to pay $80,000 in legal costs to the proprietary trading firm MyForexFunds. The award, more than five times higher than any previous cost award against the regulator, marks the latest and perhaps most pointed chapter in a dramatic cross-border legal saga that has seen both Canadian and U.S. authorities sanctioned for their handling of the case.

The decision follows a major ruling that reversed the OSC’s earlier actions, ordering the return of the vast majority of business assets belonging to MyForexFunds and its founder, Murtuza Kazmi, which had been frozen since August 2023. The court’s stinging critique of the regulator’s conduct was made explicit in the written reasons from Justice Kimmel, who stated, "the court has not been overly impressed with the manner in which the Commission has been carrying out its public interest mandate in this case."

This victory in Ontario is the second major vindication for the company, following a total dismissal of a similar case in the United States nearly a year ago. Together, the rulings paint a damning picture of regulatory overreach and have sent shockwaves through the financial and legal communities, raising profound questions about the accountability of the agencies tasked with policing capital markets.

"This award is a clear signal that regulatory power must be exercised with accountability and transparency," said Murtuza Kazmi, CEO of MyForexFunds, in a statement. "We have maintained from the beginning that the actions taken against our company were based on untrue allegations. This decision, following our total vindication in the United States, is another essential step in restoring our reputation."

A Tale of Two Rebukes: Regulators on the Defensive

The legal battles for MyForexFunds began in August 2023, when regulators on both sides of the border moved in concert to shut the company down. The OSC issued a temporary cease trade order and froze assets, launching an investigation into allegations of fraud and unregistered trading. Simultaneously, the U.S. Commodity Futures Trading Commission (CFTC) filed a complaint with similar accusations, securing a court order that froze assets and placed the company into receivership.

However, the CFTC’s case unraveled spectacularly. In May 2025, a U.S. federal judge dismissed the case against MyForexFunds with prejudice, preventing it from ever being refiled. More astonishingly, the court sanctioned the CFTC, ordering the powerful federal agency to pay MyForexFunds US$3.1 million in legal fees after finding its staff had acted in bad faith.

A report from a court-appointed Special Master revealed that CFTC staff had made "knowingly false statements" to justify the initial asset freeze. A key piece of evidence used by the CFTC was a C$31.5 million transfer, which the agency claimed was a suspicious movement of funds to an "unidentified Kazmi account." In reality, the transfer was a legitimate tax payment to the Canada Revenue Agency. The Special Master’s report concluded the CFTC took "deliberate steps down a path of obfuscation and avoidance" and acted "willfully and in bad faith on several occasions."

The fallout within the CFTC was significant. Four lawyers and one investigator involved in the case were placed on administrative leave. Acting CFTC Chair Caroline Pham issued a public statement acknowledging the damage, calling the staff's behavior "inexcusable" and stressing that the agency "must rebuild trust through transparency and accountability."

Now, the unprecedented costs award from the Ontario court suggests Canadian judiciary shares the U.S. court's dim view of the regulators' conduct in this matter, adding a significant Canadian chapter to the story of regulatory overreach.

From Global Leader to Forced Shutdown

Before its operations were abruptly halted, MyForexFunds was a quintessential startup success story. Founded in 2020 in Vaughan, Ontario, the company grew rapidly to become the world's largest proprietary trading firm, serving a global community of traders in over 80 countries.

The firm operated in the burgeoning "prop trading" space, offering evaluation programs where aspiring traders could prove their skills on simulated accounts. Those who passed the evaluation by demonstrating discipline and effective risk management were given access to larger simulated trading accounts, from which they could earn a share of the profits without risking their own capital.

The CFTC’s initial allegations in 2023 painted a sinister picture, accusing the firm of being a fraud that profited primarily from customer fees rather than trading. The regulator claimed MyForexFunds misled customers into thinking they were trading on live markets when they were not, and that the firm used tactics like artificial delays and price slippage to ensure most traders failed. These allegations, which were used to justify the asset freeze that crippled the company, have now been thoroughly discredited in U.S. court and sharply criticized in Canada.

The High Cost of Error and the Path to Rebuilding

While the legal victories are a profound vindication, the road back for MyForexFunds is complex. The company is currently in the process of unwinding the remaining elements of the receivership and regaining full control over its assets, data, and intellectual property. A full financial and operational review is underway.

In a move to restore faith with its user base, the company has announced that traders who had submitted payout requests before the August 2023 shutdown will be eligible to receive their funds. This is a critical first step in rebuilding the trust of a community that was left in limbo by the regulatory actions.

The case serves as a stark reminder of the immense damage that can be inflicted when regulatory power is misapplied. The financial costs are staggering—millions in legal fees and lost revenue—but the reputational harm and disruption to the lives of employees and clients are incalculable.

Shockwaves in the Proprietary Trading Industry

The MyForexFunds saga has been a major wake-up call for the entire proprietary trading industry. It has cast a harsh spotlight on the business models used by many firms and the potential for conflicts of interest, particularly the distinction between firms that act as a counterparty to their clients' trades (B-book) versus those that pass trades to third-party liquidity providers (A-book).

Legal and financial experts believe the case will inevitably lead to heightened regulatory scrutiny of the sector. The key takeaway for other firms is the critical importance of transparency and robust compliance. Clearly disclosing how accounts operate—whether simulated or live—and how the firm generates revenue will be paramount to avoiding regulatory pitfalls in the future.

Some analysts have criticized the CFTC’s approach as "regulation by enforcement," where agencies pursue legal action in emerging industries without clear rules in place. While aimed at consumer protection, this strategy carries the immense risk of error, as demonstrated by this case. These landmark rulings against both the OSC and CFTC have established a powerful new precedent, signaling that courts are willing to hold even the most powerful government agencies accountable for their actions. This shift could fundamentally reshape the dynamic between regulators and the industries they oversee for years to come.