September 30, 2014
Washington, DC — The U.S. Commodity Futures Trading Commission (CFTC) today filed a civil enforcement Complaint in U.S. District Court for the District of Columbia against Defendant Daniel Shak of Las Vegas, Nevada, for violating an administrative Order (CFTC Order) entered by the CFTC on November 25, 2013 (see CFTC Press Release 6781-13). The CFTC Order, among other things, prohibited Shak from trading outright futures contracts in any market during the closing period for a period of two years.
According to the CFTC Complaint, after voluntarily consenting to the CFTC Order prohibiting him from engaging in certain commodity futures trading, six months later Shak violated the CFTC Order by trading two outright June 2014 gold futures contracts during the closing period on May 22, 2014 — the exact type of commodity futures trading that he agreed to be banned from trading. The Complaint further alleges that 1) Shak failed to report his violation of the CFTC Order to either the CFTC or to his Futures Commission Merchant (FCM), 2) Shak, and/or an individual acting on behalf of Shak, only admitted the trade after being confronted by the FCM, and 3) the FCM, rather than Shak, promptly reported the trade, which constitutes the violation of the CFTC Order, to the CFTC.
The CFTC Order charged Shak and SHK Management, LLC (SHK) with attempting to manipulate the price of Light Sweet Crude Oil (WTI) futures contracts on the New York Mercantile Exchange and violating intraday spot month speculative position limits applicable to WTI futures contracts on two days in 2008. The CFTC Order required Shak and SHK to jointly pay a $400,000 civil monetary penalty, permanently banned Shak and SHK from trading in any Crude Oil markets, and imposed a two-year ban from trading outrights for any product or financial instrument regulated by the CFTC during the closing period, among other sanctions. Shak was a former principal of SHK.
The CFTC filed this Complaint to enforce the 2013 CFTC Order, and the Complaint seeks additional civil monetary penalties against Shak personally.
The following CFTC staff members are responsible for this case: Jennifer Diamond, James H. Holl, III, and Rick Glaser.
Last Updated: September 30, 2014