The Commodity Futures Trading Commission has announced the District Court for the Northern District of Alabama has found that Negus Capital Incorporated (NCI) and his owner Aaron B. Butler have engaged in fraudulent solicitation, misappropriation, and registration violations in trading binary options trading.
The court has ordered NCI to pay over $1.1 million. The company is ordered to pay back the defrauded customers the amount of $294,545 and $883,635 in a civil monetary penalty. The company is permanently enjoined from engaging in conduct that violates regulations, registering with the CFTC, and trading in any CFTC-regulated markets.
The US watchdog also found that Butler would gather between $500 and $5,000 of customer deposits into a single trading account at Nadex. As the trader for NCI, he would use that money to trade binary options on the customers’ behalf. Butler would leave clients to think that each customer payment would be placed into separate customer trading accounts. Instead, the company misappropriated most, if not all of the funds for Butler’s personal benefit for things such as jewellery, purchases at Apple stores, and Toys “R” Us gift cards.
The CFTC found that between 16 March 2017 and 21 February 2018 NCI unlawfully solicited $294,545 from 70 investors to trade binary options contracts on the North American Derivatives Exchange (Nadex). It was discovered that NCI defrauded those customers, and operated as an unregistered commodity pool operator.
Butler and NCI were charged back in 2019. The court previously granted a permanent injunction against Butler. He was also ordered to pay a combined $755,000 in restitution and civil monetary penalty for his violations.
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