JadeFx shut down by the CFTC

JadeFx shut down by the CFTC

The complaints started on March 2nd in the reviews. A number of reviewers reported issues connecting to JadeFx's MT4 servers.. On March 7th, FPA member Horacio Ofman reported in the forums that the Jade FxLtd's website was down and that metatrader wouldn't connect to their servers. He also quoted an email they sent to clients discussing options including bankruptcy and conplete shutdown of the company. FPA member LuckyLuke72 reported getting the same message.

On March 14th, reviewer Steve from Singapore submitted a link to a CFTC Press Release that came out on March 9th. The charges made by the CFTC were very serious. The text of the press release reads...

CFTC Charges Jacob Juma Omukwe and his Companies with Solicitation Fraud and Misappropriation in $3 Million Foreign Currency Scheme
Federal court issues emergency order freezing defendants’ assets and preserving books and records.

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced the filing of a complaint in the U.S. District Court for the Western District of Wisconsin charging defendants Jacob Juma Omukwe, JadeFX Ltd. (JadeFX) and Jade Investments Group, LLC (Jade), all of Wisconsin Dells, Wis., with operating a fraudulent off-exchange retail foreign currency (forex) scheme through the website www.jadefx.com. None of the defendants has ever been registered with the CFTC.

On the same day the complaint was filed under seal, March 2, 2011, U.S. District Court Judge William M. Conley entered a restraining order, also under seal, freezing defendants’ assets and prohibiting the destruction of books and records.

The CFTC complaint alleges that, from at least June 2009 through the present, Omukwe, Jade FX and Jade fraudulently solicited and misappropriated more than $3.2 million from more than 500 customers in the United States and throughout the world to trade forex. Contrary to Omukwe’s representations, only a fraction of customer funds were traded and most of the funds were misappropriated. In addition, the complaint alleges that JadeFX and Omukwe failed to register as a retail foreign exchange dealer (RFED) and associated person (AP) of an RFED, respectively, as required under the Commodity Exchange Act (CEA) and CFTC regulations.

Defendants allegedly made explicit but false guarantees on the JadeFx website including that (1) all customer funds are traded in forex, (2) customer funds are completely segregated from JadeFX’s operating accounts and (3) customer funds were protected from bankruptcy.

Instead of segregating customer money into separate accounts, Omukwe allegedly pooled all customer funds together into bank accounts that he exclusively controlled. From these bank accounts, only a portion of customer money was traded in forex. Omukwe allegedly misappropriated the remaining funds to pay for personal and business expenses, including the operational costs of JadeFX and Jade.

Court Enters Consent Order of Permanent Injunction against the Defendants on March 8

A consent order of permanent injunction entered by Judge Conley on March 8, 2011, finds that Omukwe, JadeFX and Jade Investments Group violated the CEA by defrauding customers in connection with foreign exchange transactions. It also finds that JadeFX and Omukwe violated the CEA and Commission regulations by failing to register as RFEDs and that Omukwe violated the CEA and Commission regulations by failing to register as an associated person of an RFED.

Judge Conley’s order permanently prohibits Omukwe, JadeFX and Jade Investments Group from further violations of federal commodity laws. The consent order also permanently prohibits defendants from engaging in any commodity-related activity and from registering with the CFTC in any capacity. Finally, the order requires Omukwe, JadeFX and Jade Investments Group to pay restitution to defrauded customers, disgorge ill-gotten gains and pay a civil monetary penalty. The order leaves the amounts of restitution, disgorgement and civil monetary penalties to be determined at a later date as part of the CFTC’s ongoing civil litigation.

CFTC Division of Enforcement staff members responsible for this case are Gregory Scopino, Sophia Siddiqui, Tracey Wingate, Michael Amakor, Patricia Gomersall, Timothy J. Mulreany, Paul Hayeck and Joan Manley.
There isn't too much more to be said that's not in the CFTC press release. The only good part of this that we can see is that the problem is smaller than that with some other scam brokers.

We encourage all account holders to contact the CFTC immediately.


Original complaint against Jade Fx

FPA Scam Confirmation for JadeFx.com

FPA Review Page for JadeFx.com

CFTC Press release regarding JadeFx
 

Pharaoh

Colonel
Messages
19,777
Looks like "We're based in Belize so the CFTC can't touch us" doesn't work as well as it used to.
 

PipStar

Sergeant
Messages
223
The problem as I read from the filed documents is that they were not based in Belize, JadeFX were lying about this. They were located in the USA.
And they also had U.S customers which as you know is prohibited unless they are registered with CFTC. Jade lied about this also.
 

awsl

Private, 1st Class
Messages
24
This dude is mostly likely to pay a fine, set up another brokerage firm elsewhere to continue the scam.
 

hkarnick

Recruit
Messages
1
Careless but no deliberate scam

I was a client of JadeFX for over a year and throughout experienced they / he did an excellent job providing service to me as a trader, be it by spread, prompt execution, withdrawal, notices - everything worked in a way he deserved an excellent score as compared to the brokers on the market.

From discussions in the DonnaForex.com JadeFX forum I got the impression, however, that he obviously is a sort of excellent technical guy who on the other side does not care too much about regulations and proper internal funds procedures: Careless in that respect. But I cannot see any intention of scamming.

I joined an initiative in the above mentioned forum to contact CFTC hoping to recover a great deal of my remaining funds at JadeFX.

Hartmut
 

hyperbolic

Private, 1st Class
Messages
38
I was a client with JadeFX until June of 2010. Made a decent profit. I closed my account after they sent notice that they would no longer work with US clients. Withdrawal was prompt. This CFTC action is a surprise to me.
 

Marketjoy Trader

Private, 1st Class
Messages
81
Is it just about being technical

I am sort of an excellent technical guy too! Can i also become a broker, and of course with my technically excellent friend Bill Gates?
I was a client of JadeFX for over a year and throughout experienced they / he did an excellent job providing service to me as a trader, be it by spread, prompt execution, withdrawal, notices - everything worked in a way he deserved an excellent score as compared to the brokers on the market.

From discussions in the DonnaForex.com JadeFX forum I got the impression, however, that he obviously is a sort of excellent technical guy who on the other side does not care too much about regulations and proper internal funds procedures: Careless in that respect. But I cannot see any intention of scamming.

I joined an initiative in the above mentioned forum to contact CFTC hoping to recover a great deal of my remaining funds at JadeFX.

Hartmut
 
Messages
7
I had an account with JadeFX since November 2009. I never had any issues with them. Support by email and phone was very swift, deposits and withdrawals were fast and the platform was excellent. The whole debacle is a great suprise and shame.

Now we need to work at getting our money out.
 

Brittany

Recruit
Messages
3
I was a client of JadeFX for over a year and throughout experienced they / he did an excellent job providing service to me as a trader, be it by spread, prompt execution, withdrawal, notices - everything worked in a way he deserved an excellent score as compared to the brokers on the market.

From discussions in the DonnaForex.com JadeFX forum I got the impression, however, that he obviously is a sort of excellent technical guy who on the other side does not care too much about regulations and proper internal funds procedures: Careless in that respect. But I cannot see any intention of scamming.

I joined an initiative in the above mentioned forum to contact CFTC hoping to recover a great deal of my remaining funds at JadeFX.

Hartmut
Did you read this part of the CFTC complaint:

"Instead of segregating customer money into separate accounts, Omukwe allegedly pooled all customer funds together into bank accounts that he exclusively controlled. From these bank accounts, only a portion of customer money was traded in forex."

How is that not a deliberate scam?
 

Chrisbenjy

Recruit
Messages
5
It sounds to me like a 'victim-less' crime. I don't think the legal action is because they were refusing payments to clients, etc, but rather because they weren't following industry protocols.
 
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