Las Vegas resident Daniel Shak has been permanently banned from commodity trading and ordered to pay a $750,000 penalty after being found guilty of spoofing and market manipulation, the Commodity Futures Trading Commission (CFTC) announced Wednesday, April 10, 2024.
The U.S. District Court for the District of Nevada entered a consent order on April 9, resolving charges that Shak engaged in the illegal practices between February 2015 and March 2018. The CFTC initially filed a complaint against Shak on August 5, 2022.
According to the CFTC, Shak repeatedly utilized a technique known as “spoofing” – placing orders for gold and silver futures contracts with the intent to cancel them before execution. He allegedly did so to create a false impression of market demand or supply, tricking other participants into executing trades at favorable prices for himself. On hundreds of occasions, Shak would place these large, deceptive orders while simultaneously trading on the opposite side of the market.
The court found that Shak’s spoofing allowed him to fill orders more quickly, at better prices, and in larger quantities than he would have otherwise been able to achieve. This constitutes a manipulative and deceptive scheme in violation of the Commodity Exchange Act (CEA) and CFTC regulations.
This isn’t Shak’s first run-in with regulators. In 2013, the CFTC sanctioned him for attempted market manipulation related to crude oil futures. Two years later, he violated the terms of that previous order, leading to further sanctions from the U.S. District Court for the District of Columbia.
“The penalty and permanent trading ban imposed here demonstrate there is no place for recidivism in CFTC regulated markets,” stated Ian McGinley, CFTC Director of Enforcement. “The CFTC will impose substantial penalties to achieve appropriate deterrence.”
The CME Group Inc. assisted the CFTC in this investigation. The case was led by Brian Hunt, James Holl III, Maura Viehmeyer, Erica Bodin, Elizabeth May, Jordon Grimm, and Rick Glaser, with assistance from the CFTC’s Spoofing Task Force.
Source: CFTC.gov
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