CFTC and CME Charge Trader for Violations Related to Live Cattle Futures
The Chicago Mercantile Exchange (CME) and Commodity Futures Trading Commission (CFTC) issued an Order filing and settling charges against Nathan Harris, a registered trader, for fraud, unauthorized trading, and violating speculative position limits in live cattle futures contracts.
It’s alleged that between January 2012 and August 2014, Harris engaged in fraud and unauthorized trading by exceeding customers’ instructions concerning the size and risk of positions, failing to obtain specific authorization from certain customers for particular trades, and failing to obtain signed powers of attorney from certain customers. Harris’s unauthorized trading resulted in approximately $10.3 million in customer losses. Through Harris’s unauthorized trading in one customer’s account, he also exceeded CME’s live cattle spot-month limit.
Harris engaged in this conduct while registered as an associated person of his former employer, which was a registered Introducing Broker.
CME issued a Notice of Disciplinary Action in which Harris agreed to pay a fine of $1.25 million. The CFTC’s also order imposes a civil monetary penalty of $1.25 million and permanent restrictions on Harris’s registration with the CFTC. The order also imposes restrictions on Harris’s registration as an associated person, which include certain permanent compliance restrictions.
These actions are an important reminder to registered entities, including Introducing Brokers, that monitoring for compliance with market rules is essential to their operations.
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