Washington, D.C. — The Commodity Futures Trading Commission today filed a civil enforcement action in the U.S. District Court for the District of Nevada against Daniel Shak of Las Vegas, Nevada, charging him with spoofing and engaging in a manipulative and deceptive scheme in the gold and silver futures markets.
In its continuing civil litigation, the CFTC seeks, among other relief, civil monetary penalties, disgorgement, trading bans, and a permanent injunction against future violations of the federal commodities laws, as charged.
“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,” said CFTC Acting Division of Enforcement Director Gretchen Lowe.
The complaint alleges that from February 2015 through March 2018, Shak repeatedly engaged in manipulative or deceptive acts and practices by spoofing—bidding or offering with the intent to cancel the bid or offer before execution—while placing orders for and trading gold and silver futures contracts on the Commodity Exchange, Inc. On hundreds of occasions, Shak entered large orders for gold or silver futures that he intended to cancel before execution, while placing orders on the opposite side of the gold or silver futures market. By placing the spoof orders, Shak intentionally or recklessly sent false signals of increased supply or demand that were designed to trick market participants into executing against orders on the opposite side of the market, which he actually wanted filled. Shak’s spoof orders allowed him to fill orders on the opposite side of the market sooner, at a better price, and/or in larger quantities than they otherwise would have been filled.
The CFTC acknowledges and thanks CME Group Inc. for their assistance in this matter.
This case is brought in connection with the CFTC Division of Enforcement’s Spoofing Task Force. The Division of Enforcement staff responsible for this case are Brian Hunt, James Holl III, Maura Viehmeyer, Erica Bodin, Elizabeth May, Jordon Grimm, and Rick Glaser.