Another Binary Options bites the dust: Aaron Butler’s NCI to pay $1.1 million for fraud
Mr. Butler told customers his firm would pool customer deposits into a single trading account at Nadex and trade on the customers’ behalf. Instead, he spent tens of thousands of dollars on jewelry, purchases at Apple stores, and Toys “R” Us gift cards.
The Commodity Futures Trading Commission today announced that Judge Liles C. Burke of the U.S. District Court for the Northern District of Alabama entered a default judgment against
Negus Capital Incorporated (NCI), through its owner Aaron B. Butler, was found guilty of fraudulent solicitation, misappropriation, and registration violations in connection with binary options trading.
Judge Liles C. Burke of the U.S. District Court for the Northern District of Alabama has ordered NCI to pay $294,545 in restitution to defrauded customers and a civil monetary penalty of $883,635.
A 2019 enforcement action by the CFTC had charged Mr. Butler and NCI and the court had previously granted a permanent injunction against Mr. Butler and requiring him to pay a combined $755,000 in restitution and civil monetary penalty.
The CFTC found that from March 16, 2017, through February 21, 2018, The binary options firm unlawfully solicited and accepted $294,545 from 70 members of the public to trade binary options contracts on the North American Derivatives Exchange (Nadex), defrauded those customers, and operated as an unregistered commodity pool operator.
According to the regulator and the court, Mr. Butler told customers his firm would pool customer deposits between $500 and $5,000 into a single trading account at Nadex and would use those funds to trade binary options on the customers’ behalf.
Instead, the defendant misappropriated most, if not all of the funds for Mr. Butler’s personal benefit, including spending tens of thousands of dollars on jewelry, purchases at Apple stores, and Toys “R” Us gift cards.
In another case brought forth by the CFTC, the regulator settled charges with Glenn Olson for his role in a binary options fraud, requiring Mr. Olson to disgorge all of his ill-gotten gains, totaling $241,070.
According to the order, at least 27 customers lost a total of $846,405 as a result of the fraudulent scheme. Mr. Olson and other defendants were ordered to pay that sum in restitution, but victims were cautioned that they might never recover the money lost because wrongdoers may not have sufficient funds or assets.
The binary options fraud was operated by Blue Bit using alias names between 2014 and 2018. The firm would misrepresent the profitability of trading, manipulate or fabricate purported trades in their customers’ accounts to the customers’ disadvantage, prevent customers from withdrawing funds, and misappropriate customer funds.
While ASIC, Australia’s financial watchdog, has recently decided to ban binary options trading offerings to retail customers, courts across the world are still filled with cases of fraud involving binary options.