WASHINGTON D.C. – The Commodity Futures Trading Commission (CFTC) has settled charges against Nathan Harris for his role in a fraudulent trading scheme, according to an order issued September 30, 2020. While the charges were brought against A&A Trading, Inc. for failing to report Harris’s activity, the core of the violation stems from Harris’s unauthorized trading practices.
The CFTC found that A&A Trading, a Chicago, Illinois-based introducing broker, failed to file a Suspicious Activity Report (SAR) with the Financial Crime Enforcement Network (FinCEN) after learning of Harris’s unauthorized trading in customer accounts. Kooima & Kaemingk Commodities Inc. (K&K) alerted A&A Trading on May 5, 2014, that Harris, a former K&K employee, was conducting unauthorized trades and that the company would reimburse affected customers.
Despite this notification, A&A Trading did not file the required SAR within the 30-day timeframe, nor did it report the violations to the CFTC. Furthermore, the order details that A&A Trading continued to process unauthorized trades initiated by Harris even after being informed of his misconduct, ignoring clear warning signs that the illicit activity continued between May and August 2014.
The CFTC previously addressed charges against Harris, K&K, and its principals related to the unauthorized trading. This latest action focuses on A&A Trading’s failure to adequately supervise and report the suspicious activity.
As a result of the settlement, A&A Trading will pay a $400,000 civil monetary penalty and disgorge $95,329 in profits earned through the violations. The case was pursued by the CFTC’s Division of Enforcement, specifically staff members Nicholas Sloey, Elsie Robinson, Lauren Fulks, Chris Reed, Charles Marvine, and former staff member Peter Riggs.
The CFTC emphasized that intermediaries like A&A Trading are required to monitor for and report suspicious activity, as SARs are crucial tools for identifying fraud and manipulation in the markets.
Source: CFTC.gov
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