Alleged FX fraudster Jason Amada wants to stay CFTC action against him

Maria Nikolova

Jason Amada and Amada Capital Management LLC want to stay the CFTC action pending resolution in related criminal proceedings.

Less than two months after the United States Commodity Futures Trading Commission (CFTC) launched a civil action against Jason Amada and Amada Capital Management LLC, charging them with fraud and registration failures, the defendants have moved to stay the action brought by the US regulator.

On Monday, October 22nd, the defendants submitted a Motion to stay the civil case at the New York Southern District Court. The defendants ask for an Order staying this civil action as against the defendants pending resolution in the indictment and attendant criminal proceeding: People v. Jason Amada, Indictment No.: 3017-2018, Supreme Court, New York County.

This motion is made on the ground that a stay of this civil action is necessary to protect defendant Amada’s Fifth Amendment rights in connection with the above-referenced criminal proceeding, which arises from the same underlying facts as this civil action.

In addition, the civil action should be stayed as to defendant ACM, as the alleged sole owner and representative of ACM, defendant Amada is the sole person through whom ACM can present a meaningful defense. Absent a stay, the entity defendant is said to be precluded from offering any meaningful defense. According to Jason Amada, ACM is not even a separate entity; ACM is merely a name by which defendant Amada is alleged to do business.

Let’s recall that, in August this year, an impaneled Grand Jury in the Supreme Court of the State of New York, County of New York, indicted defendant Amada after hearing a presentation by the Attorney General of the State of New York . The indictment charges defendant Amada with Grand Larceny in the Second Degree in violation of New York Penal Law §155.40(1); and a Violation of New York General Business Law§ 352-c(6).

Defendant Amada is charged in a criminal indictment with alleged conduct that is identical to the allegations of the CFTC in the instant proceeding. Defendant Amada says he will be unable to offer any meaningful defense to the plaintiffs allegations, both on his own behalf and on behalf of defendant ACM, without waiving his Fifth Amendment rights. Only the issuance of a stay of the civil proceeding, he says, will preserve his constitutional rights and his ability to defend this action.

According to the indictment and statements made by the prosecutor at arraignment, in the summer of 2015, Amada allegedly fraudulently solicited a client and promised to save her the exchange fees that she would have otherwise been charged when converting Euros to U.S. dollars in order to purchase an apartment in Manhattan. Amada allegedly misrepresented his professional experience and his company’s historical profits and then convinced his client to open an online retail foreign exchange trading account and transfer control of approximately €250,000 to Amada. Amada also allegedly failed to disclose that his broker’s license had expired three years prior, in May 2012.

In order to further induce his client to invest, Amada allegedly executed a written contract promising the client that she would not lose more than one percent of the money invested, and that he would only take a commission if the account earned a profit. Contrary to his representations, once he had control of the money, Amada allegedly engaged in an aggressive and speculative day-trading strategy involving foreign currency orders, which generated commissions for Amada regardless of whether the trades resulted in a profit or loss for his client. Within just 45 days, this strategy generated over $150,000 in fees and commissions for Amada – but resulted in the loss of over 99% of his client’s initial investment of €250,000.

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.

The CFTC Complaint alleges that the Defendants fraudulently solicited clients for these accounts by, among other things, misrepresenting Defendants’ forex trading experience and profitability. Furthermore, the Defendants made the false claim that they would implement a hedging strategy that would prevent losses of more than one percent. Also, 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.

The civil case is captioned Commodity Futures Trading Commission v. Amada et al (1:18-cv-07895).

Read this next

Retail FX, Technology

MetaTrader’s iOS issue opens brokers’ eyes to other trading platforms

In a surprising (or-not-so-surprising) move, Apple has removed MetaTrader 4 and MetaTrader 5 from its App Store in a huge blow for the leading FX trading platform provider.

Retail FX

Pepperstone adds analytics and automated trading tools free of charge

“We look forward to bringing significant value to Pepperstone traders and making a real, positive impact in their daily trading habits. We are excited to welcome them on board.”

Retail FX

FP Markets wins Best Global Value Broker for 4th consecutive year at the 2022 Global Forex Awards

“We greatly appreciate the continued international recognition as at FP Markets we pride ourselves on these attributes and these prestigious awards are testament to the hard work from our global team to always provide our clients with the ultimate trading experience.”

Inside View

How to Engage Your Customer at Every Stage of Their Journey

As many as 89% of successful businesses say that providing assistive customer experiences is critical to their growth. That’s because a mere 5% increase in customer retention can boost profits by 25% to 95%.

Industry News

CFTC fines Chinese firms Chinatex and COFCO $720,000 for wash trading

Chinatex traders engaged in wash trading in order to liquidate a long position in the account of an affiliated company and re-establish the position in its own account, to the ultimate benefit of its parent company, COFCO.

Industry News

US-based operation of Brazilian broker XP fined $500,000 for recordkeeping failures

“Proper recordkeeping is vital to protecting our markets and market participants from fraud and manipulation. This case serves as another example of the Commission’s intent to vigorously enforce the recordkeeping obligations of its registrants.”

Digital Assets

Bitfinex announces integration of USDt on Polkadot

Polkadot is the brainchild of British computer programmer and Ethereum co-founder and former CTO Gavin Wood.

Executive Moves

FPG hires ex-Fireblocks Chris Hazelton to head marketing at crypto prime broker

“Chris’s experience as a marketing leader at several exceptional businesses will help us refine our message to an institutional audience that’s overwhelmed with new information and show tangible examples of how we’ve helped customers like them scale successfully in crypto.”


FinanceFeeds Podcast Ep. #6: Gold-i’s Tom Higgins talks efficiency in FX and inner workings of Crypto Switch

On its sixth episode, the FinanceFeeds Podcast welcomed Tom Higgins, the founder and chief executive of trading systems integration provider, Gold-i.