Daniel Shak, Spoofing, Nevada 2022

Las Vegas resident Daniel Shak has been accused of spoofing and market manipulation in a complaint filed by the Commodity Futures Trading Commission (CFTC) on August 5, 2022, in the U.S. District Court for the District of Nevada.

The CFTC alleges that between February 2015 and March 2018, Shak engaged in a manipulative scheme involving gold and silver futures contracts traded on the Commodity Exchange, Inc. Specifically, the complaint details a pattern of “spoofing” – placing and then canceling large orders with no intention of execution – designed to mislead other market participants.

According to the CFTC, Shak would enter substantial buy or sell orders for gold or silver futures, intending to cancel them before they could be filled. Simultaneously, he placed orders on the opposite side of the market, aiming to profit from the false signals created by the spoof orders. This tactic allegedly allowed Shak to execute his desired trades faster, at more favorable prices, and in larger volumes than would have otherwise been possible.

“These charges demonstrate once again that the CFTC will vigorously prosecute to the fullest extent of the law, misconduct that has the potential to undermine the integrity of our markets,” stated Gretchen Lowe, Acting Division of Enforcement Director for the CFTC.

The CFTC is seeking civil monetary penalties, disgorgement of ill-gotten gains, a ban on future trading activities, and a permanent injunction against Shak to prevent further violations of federal commodities laws. The CME Group Inc. provided assistance in the investigation. The case is being pursued by the CFTC's Spoofing Task Force, with staff members Brian Hunt, James Holl III, Maura Viehmeyer, Erica Bodin, Elizabeth May, Jordon Grimm, and Rick Glaser leading the charge.

The specific amount of penalties and disgorgement sought were not disclosed in the press release.

Source: CFTC.gov

Source: https://www.cftc.gov/PressRoom/PressReleases/8568-22