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Post date: August 29 2018

A.G. Underwood Announces Indictment Of Former Stockbroker For $250K Securities Fraud Scheme

News from the New York Attorney General's Office 

FOR IMMEDIATE RELEASE
August 29, 2018

Attorney General's Office Press Office / 212-416-8060
nyag.pressoffice@ag.ny.gov 

A.G. UNDERWOOD ANNOUNCES INDICTMENT OF FORMER STOCKBROKER FOR $250K SECURITIES FRAUD SCHEME

 

Defendant Allegedly Falsely Claimed to be a Broker to Lure an Investor into Giving Him $250,000 – Which He Subsequently Lost in Aggressive and Speculative Day-Trading Strategy

If Convicted, Defendant Faces Up to 15 Years in Prison

NEW YORK – Attorney General Barbara Underwood today announced a felony indictment charging former stockbroker Jason Ari Amada, 41, of Forest Hills, Queens, with falsely claiming to be a broker who successfully traded foreign currencies through his company, Amada Capital Management LLC, in order to lure an investor to give him over $250,000. Amada allegedly executed a contract committing to no loss greater than one percent and that he wouldn’t take any commission unless he generated a profit, but still proceeded to engage in an aggressive day-trading strategy that generated over $150,000 in fees and commissions for himself – while resulting in the loss of over 99% of the investor’s money.    

“As we allege, the defendant misrepresented his professional experience, failed to disclose his expired license, lost his clients’ investment, and diverted $20,000 to his personal account,” said Attorney General Underwood. My office won’t hesitate to prosecute those who scam New Yorkers out of their hard-earned money.”

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.

In an attempt to conceal the massive losses sustained in his client’s account, Amada allegedly transferred some of his commissions back into the trading account – only to lose the money due to his aggressive and speculative trading strategy. Amada also allegedly diverted over $20,000 to his own personal account, which he used for various personal expenses such as dining and gambling on FanDuel. When confronted by his client about the low balance in her trading account, Amada allegedly created a fake account statement that falsely stated that her account balance was over $150,000, when in fact it was less than $3,000.

The Attorney General’s indictment, unsealed today in New York County Supreme Court, charges Amada with one count of Grand Larceny in the Second Degree (a class “C” felony) and one count of violating the Martin Act (a class “E” felony). Amada was arraigned before the Honorable Cassandra Mullen in New York County Supreme Court and is currently being held on bail of $250,000 bond or $150,000 cash.

If convicted of the top count charged, the defendant faces up to 15 years in prison.

The charges are merely accusations and the defendant is presumed innocent unless and until proven guilty in a court of law.

The Attorney General thanks Trial Attorney Nicholas Sloey, Senior Trial Attorney Rachel Hayes, Chief Trial Attorney Peter Riggs, and Futures Trading Investigator Elsie Robinson of the Commodities and Futures Trading Commission (CFTC), and Thomas Carocci of the Financial Industry Regulatory Authority (FINRA), for their valuable assistance in the investigation of this case.

The case is being prosecuted by Assistant Attorney General Nicholas Hernandez, with the assistance of Legal Analyst Rebecca Jacobson and Supervising Legal Analyst Paul Strocko, all of the Criminal Enforcement and Financial Crimes Bureau. The Criminal Enforcement and Financial Crimes Bureau is led by Bureau Chief Stephanie Swenton and Deputy Bureau Chief Joseph G. D’Arrigo. The Criminal Division is led by Margaret Garnett, Executive Deputy Attorney General for Criminal Justice.

The investigation was handled by Investigator Brian Metz, under the supervision of Supervising Investigator Michael Leahy and Deputy Chief John McManus. The Investigations Bureau is led by Chief Dominick Zarrella. Forensic auditing was provided by Michelle Skripko of the Criminal Justice Division’s Forensic Audit Section, which is led by Chief Edward J. Keegan, Jr. and Deputy Chief Sandy Bizzarro.