Las Vegas resident Daniel Shak has been permanently banned from commodity trading and ordered to pay $750,000 in penalties after admitting to spoofing and manipulative practices in gold and silver futures markets, the Commodity Futures Trading Commission (CFTC) announced Wednesday.
The U.S. District Court for the District of Nevada entered a consent order on April 9, resolving charges brought by the CFTC in August 2022. The order also includes a permanent injunction preventing further violations of the Commodity Exchange Act (CEA) regarding spoofing and manipulative schemes.
According to the CFTC, between February 2015 and March 2018, Shak repeatedly engaged in spoofing – placing and then canceling orders with no intention of execution – while trading gold and silver futures on the Commodity Exchange, Inc. He allegedly used these “spoof” orders to create a false impression of market activity, tricking other traders into executing orders at favorable prices for himself.
The CFTC found that Shak entered hundreds of large orders he intended to cancel, simultaneously placing orders on the opposite side of the market. This tactic allowed him to fill his desired orders faster, at better prices, and in larger quantities than would have otherwise been possible.
This is not Shak’s first offense. In 2013, the CFTC sanctioned him for attempted manipulation through “banging the close” in light sweet crude oil futures. Two years later, he violated the terms of that 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,” said CFTC Director of Enforcement Ian McGinley. “The CFTC will impose substantial penalties to achieve appropriate deterrence.”
The CME Group Inc. assisted the CFTC in its 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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