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CFTC sues Nevada metal traders for spoofing in the gold and silver markets

Washington, D.C — The Commodity Futures Trading Commission today filed a civil enforcement action in the United States District Court for the District of Nevada against Daniel Shak of Las Vegas, Nevada, alleging spoofing and involvement in a manipulative and fraudulent scheme on the gold and silver futures markets .

In its ongoing civil lawsuit, the CFTC is seeking, among other things, civil fines, disgorgement, trade bans and a permanent injunction against future violations of federal commodity laws, as charged.

“These allegations demonstrate once again that the CFTC will vigorously pursue wrongdoing that could undermine the integrity of our markets, to the fullest extent of the law,” said Gretchen Lowe, deputy chief of the CFTC’s enforcement division.

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The complaint alleges that from February 2015 to March 2018 Shak repeatedly engaged in manipulative or deceptive acts and practices through spoofing — bidding or offering with intent to cancel the bid or offer before execution — while placing orders for gold and silver futures contracts placed and traded on the Commodity Exchange, Inc. On hundreds of occasions, Shak entered large gold or silver futures orders that he wished to cancel prior to execution while executing orders on the opposite side of gold – or silver futures market. By placing the spoof orders, Shak intentionally or recklessly sent false signals of increased supply or demand, intended to trick market participants into filling against orders on the opposite side of the market that he intended to fill. Shak’s spoof orders allowed him to fill orders on the other side of the market earlier, at a better price, and/or in larger quantities than they would otherwise have filled.

The CFTC recognizes and thanks CME Group Inc. for its assistance in this matter.

This case is linked to the CFTC Division of Enforcement’s Spoofing Task Force. The Division of Enforcement officers on this case are Brian Hunt, James Holl III, Maura Viehmeyer, Erica Bodin, Elizabeth May, Jordon Grimm and Rick Glaser.

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