Dan Shak Reaches Settlement in Commodities 'Spoof Order' Case; No Admission of Guilt
Without admitting guilt, Dan Shak has reached a settlement with the Commodity Futures Trading Commission (CFTC) two years after being charged with allegedly "spoofing" and manipulating in a deceptive scheme in the gold and silver futures markets.
Upon reaching an agreement with the CFTC, the high stakes poker player issued a statement to PokerNews via a PR firm.
"While I am confident I could have prevailed at trial, I have concluded the right decision for my family and me is to resolve this matter with no admission of wrongdoing and without the cost, delay, and distraction of protracted litigation. As part of finalizing the settlement, the CFTC required that I not deny their allegations, but I also do not admit them. I was an active trader making millions of trades per year, and the CFTC’s allegations relate to a small fraction of trades that allegedly occurred from 2015 to 2018.
After 45 years as a member in good standing on the exchanges, and having retired nearly two years ago, now is the right time to put this matter behind me, pursue other opportunities, and avoid litigation costs that would far exceed the fine I am paying," Shak said.
Poker High Roller to Pay Hefty Fine
According to court documents, on April 9, Shak agreed to accept civil penalties and various permanent injunctions that will hinder his ability to further trade commodities.
The CFTC alleges that Shak "entered orders and executed trades in the Futures Trading Accounts on his own behalf" from February 2015 to March 2018. He is said to have "engaged in a manipulative and deceptive scheme that consisted of spoofing the gold and silvers markets.
"Spoofing" refers to when securities buyers place market orders and then cancel them before the order is fulfilled. It is illegal and can carry steep penalties. The longtime poker player who has $13.5 million in live tournament earnings, according to The Hendon Mob, and 81 World Series of Poker (WSOP) cashes must pay a $750,000 fine as part of the settlement. He is also prohibited from having any commodity interests traded on his behalf and soliciting, receiving, or accepting any funds from anyone for the purpose of selling commodities.
The Las Vegas resident is alleged to have placed hundreds of orders on gold and silver futures with the intent to cancel them before execution. Court filings accuse Shak of following a general pattern of placing a small order of gold and silver futures that he intended to execute, and then placing one or more larger resting orders on the opposite side of the market with the intent to cancel ("spoof") after his genuine order was filled.
Per the CFTC's accusations, Shak "knew or was reckless to the fact that his Spoof Orders would send false signals of supply and demand into the market and would deceive or trick other market participants."
In 2013, the former principal of SHK Management, LLC was ordered to pay a $400,000 fine for attempting to manipulate the price of Light Sweet Crude Oil (WTI) futures contracts on the New York Mercantile Exchange (NYMEX). As a result, he was permanently banned from trading in any Crude Oil markets.
Poker Player Dan Shak in Hot Water Over Alleged Gold Market Spoofing
