09:05
09 Aug
Bluffing your opponents on high stakes poker tables is perfectly acceptable, but bluffing in the arena of commodities trading by placing large orders and canceling those orders before execution is a definite no-no.
Hedge fund operator and high stakes poker player Dan Shak has been charged with the latter in a civil action by the Commodity Futures Trading Commission (CFTC). Shak’s alleged misdeeds are known in the trading world as “spoofing.”
In a press release posted by the CFTC on August 5, Shak is accused of entering large orders on gold or silver futures hundreds of times between February 2015 and March 2018 with no intention of fulfilling those orders. Instead, he placed orders on the opposite side of the market, manipulating the factors of supply and demand in an attempt to get a better price on his intended orders.
The complaint was filed in the U.S. District Court for the District of Nevada, with the CFTC requesting that Shak be forced to pay back funds from his alleged ill-gotten gains with penalties, as well as face trading bans and a permanent injunction with regard to future violations.
CFTC Acting Division of Enforcement Director Gretchen Lowe stated that her agency “will vigorously prosecute to the fullest extent of the law misconduct that has the potential to undermine the integrity of our markets.”
Shak Nearing $12 Million in Live Cashes
While the CFTC’s Spoofing Task Force was busy building its case against Shak, the part-time poker player and high roller was busy on the felt, cashing seven times during the recently concluded 2022 WSOP. His biggest score was for $87,500 after landing in 12th place in a $50K High Roller. The Main Event saw Shak hit pay dirt in 954th place for $17,000.
Those min-cashes are part of a poker resume that dates back to 2004 and has culminated in total live earnings of $11,724,715. The headliner among Shak’s poker paydays is a 2nd place finish in a $100K Super High Roller at the 2014 PCA good for $1,178,980.
Obviously very comfortable at a poker table, Shak is certainly no stranger to a courtroom either. This latest action by the CFTC is not his first run-in with alleged deceptive trading practices.
Price manipulation on oil futures at the New York Mercantile Exchange resulted in a $400,000 fine and a trading ban in 2013. Several months later, Shak drew the ire of the CFTC once again for allegedly trading while the ban was still in effect.
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