The United States Commodity Futures Trading Commission (CFTC) has secured another win in an action against binary options fraudsters. The CFTC 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) and its owner Aaron B. Butler. The defendants were found to have engaged in fraudulent solicitation, misappropriation, and registration violations in connection with binary options trading.
The court’s order requires NCI to pay $294,545 in restitution to defrauded customers and a civil monetary penalty of $883,635. The order also permanently enjoins NCI from engaging in conduct that violates the Commodity Exchange Act and CFTC regulations, registering with the CFTC, and trading in any CFTC-regulated markets.
The court’s order stems from a 2019 enforcement action that charged Butler and NCI with fraudulent solicitation, misappropriation, and registration violations. As FX News Group has reported, the court previously entered an order granting a permanent injunction against Butler and requiring him to pay a combined $755,000 in restitution and civil monetary penalty for his violations of the Commodity Exchange Act and CFTC regulations.
The order finds that from March 16, 2017, through February 21, 2018, NCI, through Butler, 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.
The CFTC cautions victims that restitution orders may not result in the recovery of any money lost because the wrongdoers may not have sufficient funds or assets.