Muscle Shoals, Alabama resident Aaron B. Butler has been permanently banned from trading and registering with the Commodity Futures Trading Commission (CFTC) after being found liable for defrauding over 70 customers in a binary options scheme. The U.S. District Court for the Northern District of Alabama issued the order on June 17, 2020, requiring Butler to pay a combined $755,000 in restitution and civil penalties.
The CFTC initially filed a complaint against Butler and his company, Negus Capital Incorporated (NCI), on November 4, 2019, alleging fraudulent solicitation, misappropriation of funds, and unregistered activity. The court found that between March 16, 2017, and February 21, 2018, Butler unlawfully accepted approximately $305,000 from customers under false pretenses.
Butler falsely claimed he would pool customer deposits of $500 to $5,000 into a single trading account and trade binary options on their behalf. He also misled customers who deposited $5,000 or more, stating their funds would be held in separate accounts and managed by him. However, the court determined Butler misappropriated the vast majority of the funds for personal expenses, including tens of thousands of dollars spent on jewelry, electronics, and gift cards.
The CFTC continues to pursue litigation against NCI, seeking to recover ill-gotten gains, impose further civil monetary penalties, and secure a permanent injunction against future violations. The Alabama Securities Commission assisted the CFTC in the investigation. James Deacon, Kevin Samuel, Erica Bodin, and Rick Glaser of the CFTC’s Division of Enforcement were responsible for the case.
Source: CFTC.gov
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