The CFTC said that Daniel Shak, who heads a small hedge fund SHK Management LLC, entered large orders for gold and silver futures that he intended to cancel before execution while also placing orders on the opposite side of the gold or silver futures market. And this happened on hundreds of occasions.
Spoofing is a tactic of manipulating gold and silver markets by making bids or offers and canceling them before execution. The CFTC alleges that from February 2015 through March 2018, Shak engaged in this kind of activity repeatedly.
"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," the CFTC said in a press release. "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."
This is not Shak's first run-in with the CFTC either. He settled back in March 2015 after being ordered not to trade during the closing minute of the gold futures markets.
In 2013, Daniel Shak 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.
Shak is also quite well known on the world poker circuit. He has participated in 150 big poker tournaments and won more than $11.7 million dating back nearly 20 years.