(Bloomberg) — A Nevada metal dealer with a sideline on the world poker circuit was accused Friday of manipulating gold and silver markets using a technique called spoofing.
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The Commodity Futures Trading Commission alleges that Daniel Shak, who also runs a small hedge fund, has repeatedly placed orders for gold and silver futures contracts with the intention of canceling the bids or offers before execution. This practice was called spoofing and came to prominence after a high-profile criminal case involving several bankers from JPMorgan Chase & Co. were involved.
“These charges demonstrate once again that the CFTC will vigorously prosecute, to the fullest extent of the law, misconduct that has the potential to undermine the integrity of our markets,” Gretchen Lowe, acting enforcement director of the CFTC, said in a statement. .
The announcement comes as jurors in Chicago continue a fifth full day of deliberation in JPMorgan’s massive spoofing case, in which three former bankers are accused of running a criminal enterprise and conspiracy to commit price manipulation, wire fraud, commodities fraud and precious metals spoofing. to commit. futures markets.
Shak has a history with the CFTC, having settled with the agency in March 2015 over claims he traded during the last minute of the gold futures market after being ordered not to.
Shak, the founder of SHK Management LLC, is better known for participating in more than 150 major poker tournament events in which he earned more than $11.7 million through 2004. Precious metals investors may also remember Shak from more than a decade ago when the Wall Street Journal reported that his hedge fund stormed the gold market after it made poor bets, forcing him to liquidate the position and return money to clients. Shak held gold contracts worth more than 10% of the US futures market at the time.
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