Daniel Shak of Las Vegas, Nevada, is facing civil charges for violating a previous Commodity Futures Trading Commission (CFTC) order, according to a complaint filed September 30, 2014, in U.S. District Court for the District of Columbia. The CFTC alleges Shak knowingly broke the terms of an administrative order issued on November 25, 2013.
The original 2013 order stemmed from charges of attempted manipulation of Light Sweet Crude Oil (WTI) futures contracts and violations of speculative position limits in 2008. That order required Shak and his firm, SHK Management, LLC, to jointly pay a $400,000 penalty, permanently banned them from trading in crude oil markets, and included a two-year ban on trading outrights during the closing period for any CFTC-regulated product.
The current complaint details that approximately six months after consenting to the 2013 order, Shak traded two June 2014 gold futures contracts during the closing period on May 22, 2014 – the very type of trading he was prohibited from conducting. The CFTC further alleges that Shak failed to self-report the violation to either the CFTC or his Futures Commission Merchant (FCM).
According to the complaint, the trade was only admitted after being confronted by the FCM, which then promptly reported the violation to the CFTC. This failure to report the violation constitutes a separate breach of the original CFTC order.
The CFTC is seeking additional civil monetary penalties against Shak personally for this latest alleged violation. Jennifer Diamond, James H. Holl III, and Rick Glaser of the CFTC staff are leading the case.
Source: CFTC.gov
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