Unveiling the Gold Rush Gambit: The World Series of Poker Player’s Market Manipulation Saga

In a surprising turn of events, a prominent figure in both the World Series of Poker and the metals trading scene finds himself entangled in legal turmoil. Daniel Shak, a Nevada-based metals trader who dabbles in poker tournaments, faces allegations of manipulating the gold and silver markets through a tactic known as spoofing.

According to the Commodity Futures Trading Commission (CFTC), Shak, who also manages a small hedge fund, stands accused of repeatedly entering orders for gold and silver futures contracts with the intention to cancel them before execution—a practice commonly referred to as spoofing. This maneuver gained notoriety following a high-profile case involving former JPMorgan Chase & Co. bankers.

Gretchen Lowe, the acting director of enforcement at the CFTC, emphasized the seriousness of the charges, stating, “These charges demonstrate once again that the CFTC will vigorously prosecute misconduct that threatens the integrity of our markets.”

The timing of these charges coincides with ongoing deliberations in Chicago concerning the JPMorgan spoofing case, where three ex-bankers face accusations of orchestrating a criminal enterprise involving price manipulation, wire fraud, commodities fraud, and spoofing in precious metals futures markets.

This isn’t Shak’s first encounter with the CFTC. In 2015, he settled with the agency over allegations of trading during the closing minutes of the gold futures market, despite being instructed not to do so.

While Shak is renowned for his prowess in poker, having participated in over 150 major tournaments and amassed winnings exceeding $11.7 million since 2004, he’s also made headlines in the metals market. A decade ago, his hedge fund stirred up turbulence in the gold market after suffering losses, necessitating the liquidation of positions and the return of funds to investors. At that time, Shak held gold contracts equivalent to over 10% of the US futures market.