Akron, Iowa resident Nathan Harris will pay $1.25 million and face permanent restrictions on his ability to work in commodity futures after the Commodity Futures Trading Commission (CFTC) settled fraud charges against him. The CFTC order, issued September 9, 2019, details a pattern of unauthorized trading and speculative position limit violations involving live cattle futures contracts.
Between January 2012 and August 2014, while working as an associated person for a registered Introducing Broker, Harris allegedly exceeded customer instructions regarding trade size and risk. He also failed to obtain proper authorization or signed powers of attorney for certain trades. These actions resulted in approximately $10.3 million in losses for his customers.
Specifically, Harris exceeded CME’s live cattle spot-month limit while trading in one customer’s account. The CFTC noted that Harris’s former employer was previously ordered to pay restitution for his unauthorized trading, but that order has been satisfied, removing the need for a further restitution order against Harris himself.
The settlement includes significant restrictions on Harris’s future registration as an associated person. All business-related telephone calls must be recorded, and any sponsoring firm will be required to conduct quarterly on-site compliance reviews of his conduct. For two years, his sponsoring firm must also verify he receives explicit customer authorization before executing any trades.
In a related action, the Chicago Mercantile Exchange (CME) issued a Notice of Disciplinary Action, requiring Harris to pay a $1.25 million fine for the same conduct. The CFTC acknowledged this fine when determining the civil monetary penalty. The CFTC also thanked the National Futures Association for its assistance in the investigation.
The case was led by CFTC Division of Enforcement staff members Nicholas Sloey, Elsie Robinson, Lauren Fulks, Jeff Le Riche, Chris Reed, Charles Marvine, and former staff member Peter Riggs.
Source: CFTC.gov
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