The poker player and hedge fund manager was accused of manipulating futures markets
Dan Shak has recently reached a settlement with the Commodity Futures Trading Commission (CFTC) two years after he was charged with engaging in a deceptive scheme to manipulate the gold and silver futures markets through a practice known as “spoofing.” While he hasn’t admitted any wrongdoing, the settlement ended the legal proceedings against him.
Shak would issue a press release after the agreement with the CFTC 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,” said Shak.
Court documents show that, on April 9, Shak also agreed to civil penalties and several permanent injunctions that will restrict him from further commodities trading.
The CFTC alleged that Shak “entered orders and executed trades in the Futures Trading Accounts on his own behalf” between February 2015 and March 2018. The regulator also said that he “engaged in a manipulative and deceptive scheme that consisted of spoofing the gold and silver markets.”
“Spoofing” is when securities buyers cancel existing market orders before they’re fulfilled, which is illegal and can carry stiff penalties. Shak was ordered to pay a $750,000 fine as part of the settlement and is prohibited from holding any commodity interests traded on his behalf. He’s also banned from soliciting, receiving, or accepting any funds for selling commodities.
The allegations state that Shak should have been aware that his Spoof Orders would produce false indications of the market’s supply and demand and would mislead other market participants.
