New York resident Jason Amada and his firm, Amada Capital Management LLC (ACM), are facing both civil and criminal charges for allegedly defrauding clients through off-exchange foreign currency (forex) trading. The Commodity Futures Trading Commission (CFTC) filed a federal enforcement action in the U.S. District Court for the Southern District of New York on August 29, 2018.
The CFTC complaint alleges that from February 2014 through November 2015, Amada and ACM fraudulently solicited clients to open managed forex accounts while concealing substantial trading losses. Specifically, the complaint states the defendants misrepresented their forex trading experience and profitability to potential investors.
Prosecutors claim Amada falsely promised a hedging strategy that would limit losses to one percent. To mask mounting losses, the defendants allegedly transferred commissions into a client’s account. The CFTC also alleges Amada and ACM failed to register with the agency as required.
The CFTC is seeking civil monetary penalties, permanent registration and trading bans, disgorgement of ill-gotten gains, and a permanent injunction against further violations of the Commodity Exchange Act and CFTC regulations.
Simultaneously, the New York State Office of the Attorney General announced a criminal indictment against Amada, charging him with Grand Larceny in the Second Degree and a violation of the Martin Act, a New York law prohibiting fraudulent commodity sales.
The CFTC noted the cooperation of the United Kingdom’s Financial Conduct Authority and the New York State Office of the Attorney General in the investigation. The case is being pursued by CFTC staff members Nicholas Sloey, Rachel Hayes, Elsie Robinson, Peter Riggs, Joyce Brandt, Christopher Reed, and Charles Marvine.
The CFTC advises potential investors to be wary of forex trading scams and to check a firm’s registration status with the National Futures Association before investing. Suspicious activity can be reported to the CFTC via its toll-free hotline or online complaint system.
Source: CFTC.gov
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