A Huntsville, Alabama man and his company are facing federal charges of defrauding customers through a binary options scheme, according to a complaint filed by the Commodity Futures Trading Commission (CFTC) in the Northern District of Alabama.
Aaron B. Butler and his firm, Negus Capital Incorporated (NCI), allegedly solicited at least $300,000 from over 65 individuals between March 2017 and February 2018, promising to trade binary options contracts on the North American Derivatives Exchange (Nadex) on their behalf. The CFTC alleges Butler and NCI operated as unregistered commodity pool operators and advisors, violating federal regulations.
According to the complaint, Butler and NCI told investors that funds between $500 and $5,000 would be pooled into a single trading account, while deposits of $5,000 or more would be placed in separate accounts. Butler claimed he would manage and trade the funds on behalf of customers for a fee. However, the CFTC alleges Butler misappropriated the majority of the funds for personal expenses.
Investigators discovered Butler spent tens of thousands of dollars on personal items, including jewelry, Apple products, and Toys “R” Us gift cards. The complaint alleges little to no trading actually occurred as promised to investors.
The CFTC is seeking full disgorgement of ill-gotten gains, civil monetary penalties, restitution for the victims, and permanent bans on Butler and NCI from trading commodities and registering with the CFTC. They also request a permanent injunction to prevent future violations of the Commodity Exchange Act and related regulations.
The Alabama Securities Commission assisted the CFTC in the investigation. The case is being pursued by James Deacon, Kevin Samuel, and Rick Glaser of the CFTC’s Division of Enforcement.
Source: CFTC.gov
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