Semi-pro poker player and hedge fund manager, Dan Shak, recently reached a settlement deal with the Commodity Futures Trading Commission (CFTC), following charges raised against him for spoofing precisely two years prior. Despite his conviction in the possibility of a victory at trial, Shak opted for a quick resolution to avoid any prolonged litigation.
The CFTC’s allegations contend that Shak made efforts to trick and spoof in the gold and silver markets. Spoofing, often considered a shady practice, involves the placement and subsequent cancellation of market orders in proximity of their completion, thus providing an illegal avenue to manipulate market circumstances.
The Commission alleges that Shak, between February 2015 and March 2018, placed hundreds of cancel-intended gold and silver futures orders. His typical pattern involved placing a smaller order intended for execution, closely followed by a larger resting order on the opposite market side. He would then abort this resting order soon after the initial order’s execution.
Per the charges levied against him, Shak, they claim, “possessed knowledge or acted recklessly by ignoring the fact that his Spoof Orders would emanate deceptive cues about market supply and demand and mislead other market participants.”
Shak Maintains Confidence In His Case
Come April 9, Shak conceded to the terms of a settlement deal with CFTC, entailing various punitive measures: preventative clauses to disallow any commodity interests trading on his behalf; and prohibitions against solicitation, receipt, or acceptance of funds from any individual for selling commodities. He was also ordered to pay a settlement of $750,000.
It should be noted that Shak managed this settlement without acknowledging guilt. In a statement given to PokerNews via a PR agency, he delineated his belief in a potential victory at court. However, he preferred to avoid the costly and time-consuming hazards of extended legal proceedings.
In accordance with the settlement’s finalization, the CFTC mandated that I not contradict their allegations, but that is not to be construed as an admission on my part. Keeping in mind my heavy trading involvement, with millions of trades annually, the CFTC’s allegations are anchored in a minuscule fraction of trades allegedly dating between 2015 to 2018.
Dan Shak
Putting the incident behind him, Shak—boasting 45 years of good standing in the field—chose to retire two years prior. Able thus to bypass unnecessary litigation costs, he is now ready to explore other opportunities on his agenda.
