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Lesson learned 2 replies

Lesson Learned - Managed Account Abu Awaad (Please comment on this trading) 21 replies

JadeFx Discussion 4 replies

My exprience and lesson in my first week of trading 14 replies

Oh wow!...Lesson:- I haven't set a "worst case" stop!! 15 replies

Attachments: JadeFX Lesson
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JadeFX Lesson

Quoting flyer415
Now that that is over, you are correct in that I need to find a proper, well capitalised, properly regulated broker. Any suggestions.

In my case I had about 7% of my trading capital with JadeFX so it did not harm me. However it did harm some others.

Great post.

I am not going to recommend a broker as it entirely depends on your circumstances. Finding a broker that suits your trading style, is regulated in your domicile, or at least continent and offers the products that you are looking for takes time to find.

A good start is the CFTC capitalisation report to find the well financed ones, the next step is finding one that suits your trading style. Are you a scalper, a trend trader, a counter trend trader, all need different brokers/leverage/execution/spreads.

Get a report from one of the commercial providers as to their credit rating and company history and find ambiguities in there that could be of concern. Brokers with a PO box, or ones that move around should be questionable, brokers that use serviced offices or addresses similar to other service providers should be avoided like the plaque.

A broker giving good spreads may not always be the one for you if you get slipped at each and every trade.

IF you can live without MT4, you are better of finding a broker that allows you to at least execute via a different platform as MT4 has so much slippage build in purely due to design and infrastructure.

Your next step should be to speak to the regulator about them and find their enforcement history and their regulated postholders.

You then need to call them and try to visit them, do the same to their liquidity provider. A broker who will not tell you their liquidity provider has something to hide, walk away.

Once you find a broker you like, start small, keep an eye on latency, spreads, slippage and execution. Untill you get comfortable with them take a screen shot on each and every entry and exits and keep them for future references. Do that for a few months. Once you are comfortable with them increase your accountsize.

Always keep 2-3 seperate datafeeds live, just to keep an eye on their prices.

Picking a broker is a long and arduous exercise, but keep in mind that you will have a relationship with them for years to come.

GL
http://www.cftc.gov/PressRoom/PressR...pr5997-11.html
"21. ...JadeFX operates out of Wisconsin Dells and not Belize. Defendants conduct business in the United States. "

Well I guess that closes the off-shore shell corp loophole. I wonder what the other US operated/off-shore domiciled brokers are going to do. IamFX - I'm looking at you.


"23. From June 2009 to January 27, 2010, Defendants solicited and accepted over $400,000 from customers all over the world, including U.S. customers, using the misrepresentations on the JadeFX website. However, during this eight month period, JadeFX had no forex trading account to place forex trades on behalf of customers."

Read - clients were trading in a 100% virtual sand-box. Fake feed, fake transactions, no actual company trading account. Lovely..

"22. Defendants operate a web of corporate bank and PayPal accounts to accept customer funds. Customers wire or deposit money into six different corporate bank accounts and two PayPal accounts. An analysis of these JadeFX and Jade corporate bank accounts reveals there are no separate bank accounts for customer money. Instead of segregating customer
money, Omukwe, using bank accounts held under the names of JadeFX and Jade, commingles customer funds, which are thereafter exclusively controlled by Omukwe. "

Lovely...

"Omukwe, through Defendants, misappropriates customer funds by (1) transferring approximately $1.3 million into a forex account in the name of JadeFX exclusively controlled by Omukwe and (2) keeping the remaining funds, approximately $2 million, in bank accounts exclusively controlled by Omukwe.

26. Omukwe, through Defendants, further misappropriates customer funds by paying JadeFX’s expenses and Omukwe’s personal expenses out of JadeFX and Jade bank accounts that are funded by customer money. For example, Omukwe uses customer funds in these bank accounts to pay for insurance, an employee’s salary, federal taxes, utility bills, computers, and meals, among other things."

That's a lot of pizza...
Oh , NO. "i got caught finally"

LOL..............................

Quoting Trader KGB
http://www.cftc.gov/PressRoom/PressR...pr5997-11.html
....
Inserted Video
From the courthousenews.com PDF (Captured below for eternity, in case the link expires):
Quote
18. According to the “customer account agreement” that each customer enters into with JadeFX, “JadeFX Ltd is a counterparty to a trader’s transactions.” The “customer account agreement” explicitly states that all forex trading is on a leveraged or margined basis
Quote
25. From January 27, 2010, until the present, Defendants solicited and received at least $3.3 million from customers using the misrepresentations on the JadeFX website. Omukwe, through Defendants, misappropriates customer funds by (1) transferring approximately $1.3 million into a forex account in the name of JadeFX exclusively controlled by Omukwe and (2) keeping the remaining funds, approximately $2 million, in bank accounts exclusively controlled by Omukwe
Quote
27. Furthermore, Omukwe routinely makes cash withdrawals and writes checks to himself from the corporate bank accounts that hold customer money.
Quote
28. In order to foster the false impression that customer money is segregated from that of JadeFX, customers can download a software program from the Defendants’ website that purportedly enables customers to place forex trades in the customer’s account. While Defendants create the appearance of segregated accounts for customers using the software program, in fact no such accounts exist.
Quote
30. Omukwe, through the JadeFX website, asserts that JadeFX operates outside of the United States, does not do business in the United States, and is immune from federal and state laws in the U.S., including the Act. All of these representations are false.

What a truly incredibly sad and heartbreaking set of events for those who thought they were legitimately trading spot fx. I would expect we will get more details emerging over time - I was wondering how were profits paid out to the presumably few profitable customers - they may not have been, since, at a purported 90% spot fx loser rate, the few payouts they made I guess were manageable. At $3.7mil collected from 500 clients, that's all of $7,400/client - but the skew must have been many in the $1K, $2K category, but there must have been some much larger depositers there as well. (The site actually had the standard issue "institutional investor" category too)

I've not been over on donnaforex yet since this release, but this whole scenario is one of unfortunate human naivety: the first and perhaps not as blatant are overwhelmingly inexperienced traders trusting their hard earned funds to this scam operation. (Hint: don't ever be impressed by a web site and/or the words there) But, the next level of naivety are those who since last Friday's note from "Jake" on bankruptcy went out, posters elsewhere saying how they "talked to Jake", others encouraging him to come on to the forum and straighten things out, statements like "Jake is a good and moral guy", and then a Jekyll-&-Hyde-like turnaround note that "Jake" was setting up "another" liquidity provider. Bottom line is some people go through life trusting others too much. A safer approach, is to trust no one. Or, let them gain your trust.

I truly hope no one loses funds they desperately cannot do without - I fear there will be some, and that's the sad part. Let's not be too harsh towards them - they are learning in one of the most difficult ways.

I would encourage everyone to read their current customer agreements that they've entered into with their existing brokers.

As an example I quickly called up smarttradefx's and see the following (I actually recall reading it months ago):

9. Off-exchange transactions - In some jurisdictions, and only then in restricted circumstances, firms are permitted to effect offexchange transactions. The firm with which you deal may be acting as your counterparty to the transaction. STFX functions as a direct counterparty to Traders in many currency transactions. STFX neither offers the right to offset, nor guarantees a market in which to offset, transactions it effects as counterparty. Therefore, it may be difficult or impossible to liquidate an existing position, to assess its value, to determine a fair price or to assess the exposure to risk.


That is from their agreement, freely downloadable from their site; and it's all there, in contrast to their home page statement of "... we are a straight through processing (STP), no dealing desk (NDD) broker. This means all orders are executed by the liquidity provider member banks with no intervention of a dealer." I won't even begin to dissect the ludricous legalities & conditions from this snippet of their customer agreement.

Also, you must and should know who your broker's liquidity provider is - if your broker does not provide, pull your funds, and do not trade with them. Immediately. Should they provide you a LP, contact them and verify - that would have saved many jadefx member's monies. (Oh, BTW, smarttradefx refuses to disclose their LP as well - ask them by e-mail.)
Attached File(s)
File Type: pdf Trading.pdf   147 KB | 441 downloads
I encourage all who was/are Jadefx Clients, it's time for you to pay back, now get your ass up and sue this b1tch personally for fraud.

Go get your loss money back, get his car, his house, his wife...watever you can, let the guy pay back on what he've done.. sorry, there are no sympathy for this

...
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.
Last Updated: March 9, 2011

Media Contacts
Dennis Holden
202-418-5088

Office of Public Affairs

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN U.S. COMMODITY FUTURES TRADING COMMISSION,
)
)
)
)
Plaintiff,
)
)
)
v.
)
)
)
CASE NO. 11-CV-128
JADE INVESTMENTS GROUP, LLC,
JADEFX LTD aka JADEFX LLC, and
JACOB JUMA OMUKWE,
)
)
))
)
Defendants.
)
)
)
)



full report can be found here
Attached File(s)
File Type: pdf enfjadecomplaint030111[1].pdf   156 KB | 245 downloads
  • Post #50
  • Quote
  • Edited 4:52am Mar 26, 2011 4:39am | Edited 4:52am
Does anyone have got a clue, how to get money back from JADEFX? I am e-mailing CFTC but no response from them. I am calling as well but only machine is resposing.
Quoting xsuchyx
Does anyone have got a clue, how to get money back from JADEFX? I am e-mailing CFTC but no response from them. I am calling as well but only machine is resposing.
Google "donnaforex forums" and check for the JadeFX thread there; there was a private thread opened up for those that could qualify they were genuine customers, where presumably more information and real time updates are available; they seem to have taken up the 'cause' of collecting all investors and being the centralized place to congregate and strategize.
Quoting cloggie
I have said it before plenty of times on various threads, do not as a US resident try to circumvent the CFTC by finding some dodgy broker to trade with. The rules are there for a reason and the only broker that will accept you with an account that does not meet the CFTC rules is dodgy to say the least. No reputable broker will openly taunt the CFTC.

You may disagree with the rules, but they are in place as voted by your elected representatives, no point crying over spilt milk. Trade within the framework or open yourself up for guaranteed...

Time to revisit this post again and bring this thread to the top once more as a general warning to any US customer looking to circumvent US laws and regulations.

I posted the above posting well before the CFTC bureaucracy slowly ground to a conclusion here.

Still plenty of members here continued to disagree with me. How many were really just either an alias or closely associated with Jadefx we will never know.

One of the "defenders" of this lot quickly jumped on the bandwagon:

Quoting flyer415
@cloggie,

i don't think that you understand the issue. There are no US citizens using JadeFX and that is not why CFTC is investigating them. Nor were they opening taunting the CFTC.
Let me quote the CFTC directly:
Quote
Jade FX and Jade fraudulently solicited and misappropriated more than $3.2 million from more than 500 customers in the United States
http://www.cftc.gov/PressRoom/PressReleases/pr5997-11

I went through the effort back then answering this Jadefx stooge:

Quoting cloggie
Jade fx has a Delaware/Wisconsin presence, what did you expect. The CFTC has every right to shut them down if they refuse to abide by US laws. Just hiding behind a Postal address in Belize is not going to fool the regulator, even though it may fool the clients. Do a proper due dillegence and just stick to regulated brokers, you will have enough problems to deal with there.

However, he didn't waste any time once again defending Jadefx:

Quoting flyer415
Like I said, if you know of any US citizens trying to circumvent CFTC rules then you go right ahead and chastise them. While not being a US citizen or someone trying to circumvent CFTC rules and to my knowledge and the knowledge of other JadeFX clients, JadeFX was not circumventing any CFTC rules i am not sure why you believe that you are contributing to this discussion.
Of course the best defense by any fraud and criminal is always to go on the attack:

Quoting flyer415
I recognize that some find that chastising people is a sure way to exhibit their knowledge over others. While not necessarily admirable it is unfortunately a trait found in too many people.
As always, the immediate response to anyone pointing out criminal and fraudulent behaviour is to take the victims off to some dodgy "private" forum trying to keep any public negative views to a minimum:

Quoting flyer415
I will no longer post to this thread.

For any JadeFX clients you can become a member of a private forum set up for JadeFX clients at www.donnaforex.com /jadefx/
We have been in contact with the CFTC investigating team. Further info can be found there.

If flyer415 is not directly associated with Jadefx, but just a misinformed retailer, then I stand corrected.


I added a general warning to any trader thinking about trading with an unregulated broker as a US resident:

Quoting cloggie
Is anyone surprised? A retailer does business with an unregistered broker and you are guaranteed to lose your money.

Still 1,000's keep doing it and come in here complaining, that is just admitting your own stupidity and the only ones that care are the ones in the same boat.

Retailers who don't do any due dilligence in picking their broker deserve to lose every penny they put in and will not get any sympathy here.

5 minutes on Google would have shown anyone interested what Jadefx really is.

Good for the CFTC to seriously clamp down...

Quoting cloggie
You still don't get it do you, don't blame your broker for running of with your money, blame yourself for trading with them.

Now go find yourself a proper, well capitalised, properly regulated broker. Call them, visit them, talk to them, know the person you are talking to on the phone, call the regulator about them, talk to their liquidity provider. That is the kind of due dilligence you need to do, anything less and you may as well donate your money to charity.

Oh and wasting your time now on trying to get your money back is keeping...

Today we have had the next episode in this saga from the CFTC:

Quote
Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) obtained a supplemental consent order requiring defendants Jacob Juma Omukwe and his companies, JadeFX, LTD (JadeFX) and Jade Investments Group, LLC (Jade), jointly and severally to pay over $2.6 million in restitution and civil monetary penalties to settle a CFTC anti-fraud enforcement action filed in March 2011.
http://www.cftc.gov/PressRoom/PressReleases/pr6146-11

It is good to see one more broker shut down by the CFTC, it won't help the traders that lost their money but hopefully it will keep a few more from making the same mistake again even though I am not holding my breath for long on that one as plenty of noobies will continue to use dodgy brokers.

For anyone thinking they are safe with non US brokers that accept US clients, think again, the CFTC has shut down plenty of them and it is only a matter of time before they get around to yours.

I posted this thread not that long ago:

Quoting cloggie
Not sure if this has done the rounds yet. 11 more brokers named in action by CFTC for accepting US clients, 7 of them non-US based.

http://www.cftc.gov/PressRoom/PressReleases/pr6108-11


Wonder how many US noobies still open accounts with unregulated foreign brokers each and every week.

The CFTC will go after each and every non US broker who is not registered with them that accepts US clients and if you think about trading with any of these dodgy outfits, better prepare yourself to lose your deposit.

This is supposed to be the time that I take time for myself as the holiday season has started, however I felt it appropriate to revisit this thread once more in light of today's developments and as a general warning to fellow "traders" here who are either shopping for a broker or are currently trading with a broker that blatantly violates current CFTC regulations.
  • Post #53
  • Quote
  • Edited 8:28am Nov 24, 2011 8:16am | Edited 8:28am
Cloggie,

It is a real shame that you cannot understand basic English.

I was not defending JadeFx. I was a client that lost over $12,000 in funds at the time.

I started the thread as a "lesson" so everybody else could learn from my stupidity.

I have spent several months, numerous letters and numerous emails to the CFTC ensuring that restitution is provided to people like me who lost money to JadeFX.

My point in starting the thread was as seen in Post 1:

1. Ensure that you have true segregation of funds.
----I did not
2. Ensure that you truly know how your broker is/is not regulated.
---I did not
3. First sign of trouble move the majority of your funds immediately. keep some in so the account is left open and you can come back if you wish.
---I did not
4. Never have just one broker.
---I have several now
5. This is a sign of things to come.
---- I believe it is but I only deal with FSA or Swiss regulated brokers
Quoting flyer415
Cloggie,

It is a real shame that you cannot understand basic English.

I was not defending JadeFx. I was a client that lost over $12,000 in funds at the time.

I started the thread as a "lesson" so everybody else could learn from my stupidity.

I have spent several months, numerous letters and numerous emails to the CFTC ensuring that restitution is provided to people like me who lost money to JadeFX.

My point is starting the thread was as seen in Post 1:

1. Ensure that you have true segregation of funds.
----I did not
2....
I see the US government has taken a tidy sum from this, but are the clients receiving any restitution?
We are receiving between 50-60% of our balance. The rest went to CFTC fines.

The funds are being transferred to the NFA who will forward it to us so probably another month.
Quoting flyer415
We are receiving between 50-60% of our balance. The rest went to CFTC fines.

The funds are being transferred to the NFA who will forward it to us so probably another month.
HAHA Thats awesome, so the customers paid Jacob/Jadefx fines?!? Or perhaps it is a "finders fee" for all the hard work of the cftc cronies.

Government bureaucracy at its best!
  • Post #57
  • Quote
  • Last Post: Sep 24, 2012 1:02pm Sep 24, 2012 1:02pm
After one year I get almost fully refund of my capital from CFTC.
It has came with a check by post mail, realization of the check was about 1 month and finally everything ends happily for me
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