Aggregated News From Investment Management Regulators

New York Federal Court Orders Defendants to Pay More Than $595,000 for Forex Solicitation Fraud and Misappropriation

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April 17, 2020

Washington, DC — The Commodity Futures Trading Commission today announced that the U.S. District Court for the Southern District of New York entered an order of consent judgment against Jason Amada and his company Amada Capital Management LLC, both of New York, finding they fraudulently solicited more than $680,000 from 18 clients to open individually managed off-exchange foreign currency (forex) accounts and misappropriated client funds.

The order requires the defendants to pay $596,700 in restitution to defrauded clients and prohibits them from engaging in conduct that violates certain provisions of the Commodity Exchange Act and CFTC regulations. The order also permanently bans the defendants from registering with the CFTC, claiming an exemption from registration, and trading in CFTC-regulated markets. The judgment resolves a CFTC enforcement case filed on August 29, 2018. (See CFTC Press Release No. 7778-18).

According to the order, starting in at least October 2013 and proceeding through December 2018, the defendants held Amada Capital Management LLC out to the public as a commodity trading advisor and solicited consumers to open forex trading accounts, while simultaneously misrepresenting their forex trading experience and profitability, among other things. The defendants also regularly provided clients with false account statements showing profitable trading, when the defendants actually had engaged in only limited, unsuccessful forex trading and used the vast majority of client funds to make cash withdrawals or to pay for business or personal expenses, including restaurant meals, rent, and fantasy sports bets. Additionally, the defendants failed to register with the CFTC as required under the Commodity Exchange Act and Commission regulations.

In a separate action brought by the New York State Office of the Attorney General, Amada pleaded guilty to felony charges of grand larceny and operating a scheme to defraud.  [See People v. Jason Amada, Indictment No. 3017-2018 and Superior Court Information 3046-2019 (N.Y. Sup. Ct.)]. On November 21, 2019, Amada was sentenced to three to six years in prison.

The CFTC cautions that orders requiring repayment of funds to victims may not result in the recovery of any money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure that wrongdoers are held accountable.

The CFTC appreciates the cooperation and assistance of the United Kingdom Financial Conduct Authority and the New York State Office of the Attorney General.

The Division of Enforcement staff members responsible for this case are Nicholas Sloey, Rachel Hayes, Elsie Robinson, Christopher Reed, and Charles Marvine, as well as former staff member Peter Riggs.

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CFTC’s Foreign Currency (Forex) Fraud Advisory

The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Foreign Currency (Forex) Trading Fraud Advisory, to help customers identify this sort of scam.

The CFTC also strongly urges the public to verify a company’s registration with the Commission before committing funds. If unregistered, a customer should be wary of providing funds to that entity. A company’s registration status can be found using NFA BASIC.

Customers and other individuals can report suspicious activities or information, such as possible violations of commodity trading laws, to the Division of Enforcement via a toll-free hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.

-CFTC-

Regulator Information

Abbreviation: CFTC
Jurisdiction: USA

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