Poker-Playing Hedge Fund Manager Sued Over Premature BetSilla Brush
If a U.S. regulator has its way, Daniel Shak will soon have more time to focus on gambling at poker tables and none at all to spend betting on derivatives.
Shak, founder of SHK Management LLC and a competitor in the World Series of Poker, has been sued by the Commodity Futures Trading Commission over allegations that he violated a two-year ban from some trading included in a 2013 accord settling claims that he tried to manipulate oil futures prices.
Six months after the settlement, the hedge fund manager traded two gold contracts that were “the exact type of commodity futures trading that he agreed to be banned from trading,” the CFTC said in a complaint in federal court in Washington today.
“Unless restrained and enjoined by this court, Shak is likely to continue to engage in the acts and practices,” said the CFTC, which according to the complaint is seeking fines, a permanent trading ban and other relief.
Shak, who lives in Las Vegas, agreed to pay $400,000 last year in resolving the regulator’s claims that on two days in 2008, he and his firm sought to influence the price of oil by trading heavily in the two-minute period before markets close. The tactic, known in the industry as “banging the close,” was a deliberate attempt to manipulate a market, the CFTC said.
David E. Kovel, a New York-based partner representing Shak at Kirby McInerney LLP, said he “cannot fathom why they would be asking for such draconian punishments” for the activity.
“If they’re trying to protect the market, they’re looking in the wrong place,” Kovel said today in a telephone interview. “It was a minor, minor, minor infraction. Yet they are treating him like a criminal.”
Shak has had poker earnings of more than $700,000, according to the website for the World Series of Poker, whose participants have also included billionaire investor David Einhorn.