Forex trader ordered by federal court to pay more than $595,000 for fraud

From: RegTech Analyst

The U.S. District Court for the Southern District of New York has ordered Amada Capital Management and its owner to pay more than $595,000 for forex solicitation fraud and misappropriation

The Commodity Futures Trading Commission (CFTC) stated that the federal court had entered an order of consent judgment against the company and its owner Jason Amada after finding they fraudulently solicited more than $680,000 from 18 clients to open individually managed off-exchange foreign currency accounts and misappropriated client funds.

The order required the defendants to pay $596,700 in restitution to defrauded clients and prohibited them from engaging in conduct that violates certain provisions of the Commodity Exchange Act and CFTC regulations.

It also permanently banned Amada and his business from registering with the CFTC, claiming an exemption from registration, and trading in CFTC-regulated markets.

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.

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