August 29, 2018

CFTC Charges Forex Trader and Firm with Fraud and Registration Violations

Washington, DC—The Commodity Futures Trading Commission (CFTC) today filed a federal court enforcement action in the U.S. District Court for the Southern District of New York against Jason Amada of New York, New York, and Amada Capital Management LLC (ACM), a New York entity owned and controlled by Amada.  The CFTC complaint charges that, from at least February 2014 through at least November 2015, the defendants fraudulently solicited potential clients to open individually managed trading accounts for off-exchange foreign currency contracts (forex) and hid substantial trading losses incurred as a result of defendants’ managed forex trading.

Specifically, the complaint alleges that the defendants fraudulently solicited clients for these accounts by, among other things, misrepresenting defendants’ forex trading experience and profitability.  In addition, the complaint alleges that the defendants made the false claim that they would implement a hedging strategy that would prevent losses of more than one percent.  As further alleged, defendants attempted to conceal mounting losses by transferring some of their commissions into a client’s account.  The complaint also alleges that the defendants failed to register with the CFTC as required.

In its continuing litigation, the CFTC seeks civil monetary penalties, permanent registration and trading bans, disgorgement, and a permanent injunction against further violations of the Commodity Exchange Act and CFTC regulations, as charged.     

Related Criminal Charges

Today, the New York State Office of the Attorney General announced a criminal indictment charging Amada with Grand Larceny in the Second Degree and a violation of the Martin Act, a New York State statute that prohibits, among other things, the fraudulent sale of commodities products.   

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

CFTC Division of Enforcement staff members responsible for this case are Nicholas Sloey, Rachel Hayes, Elsie Robinson, Peter Riggs, Joyce Brandt, Christopher Reed, and Charles Marvine.

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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 Trading (Forex) Fraud Advisory, which states that the CFTC has witnessed a sharp rise in Forex trading scams in recent years and helps customers identify this potential fraud. 

Also, before investing or trading with a firm, check the firm’s registration status and disciplinary history, if registered, with the National Futures Association. A company’s registration status can be found at: www.nfa.futures.org/basicnet.

Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the CFTC Division of Enforcement via a Toll-Free Hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.