CFTC Imposes $750,000 Penalty and Lifetime Trading Ban on Daniel Shak for Metals Market Spoofing

The Commodity Futures Trading Commission (CFTC) has announced that the U.S. District Court for the District of Nevada entered a consent order resolving charges against Daniel Shak of Las Vegas, Nevada. The order addresses allegations of spoofing and a manipulative and deceptive scheme in the gold and silver futures markets, violating the Commodity Exchange Act (CEA) and CFTC regulations. Under the terms of the consent order, Shak is required to pay a $750,000 civil monetary penalty. In addition, he is permanently barred from trading commodity interests, permanently prohibited from registering with the CFTC in any capacity, and subject to a permanent injunction preventing further violations involving spoofing and deceptive schemes to defraud. According to the findings, Shak repeatedly engaged in spoofing from February 2015 through March 2018 while trading gold and silver futures contracts on the Commodity Exchange, Inc. (COMEX). Spoofing involves submitting bids or offers with the intent to cancel them before execution. On hundreds of occasions, Shak submitted large orders he did not intend to execute on one side of the market while placing genuine orders on the opposite side. This tactic intentionally or recklessly sent false signals of increased supply or demand, misleading market participants and allowing Shak to get his genuine orders filled faster, at better prices, or in higher volumes. The regulatory action emphasizes enforcement against repeat offenders. Shak was previously sanctioned by the CFTC in 2013 for attempted manipulation in Light Sweet Crude Oil futures contracts, and was further sanctioned by the U.S. District Court for the District of Columbia in 2015 for violating the terms of that regulatory order. The CFTC reaffirmed its policy to heavily factor recidivism into civil penalties to deter persistent misconduct across regulated financial markets.