US natgas price-fixing suit could be thrown out

15 January 2008 23:36  [Source: ICIS news]

HOUSTON (ICIS news)--The attorney of a natural-gas trader who was accused of price fixing said on Tuesday he will ask a judge to throw out the case because of inconsistent findings by a jury.

The US Commodity Futures Trading Commission (CFTC) sued the trader, Anthony Dizona, in 2005, accusing him of manipulating natural-gas markets by providing false information to trade publications.

Natural gas is a key feedstock for chemicals in the US.

On Tuesday, the jury rejected one of the key accusations made by the CFTC - that Dizona knowingly provided false market information to the trade publications.

However, the jury did accept a lesser accusation made by the commission - that Dizona intended to attempt to manipulate natural-gas prices.

The jury's findings are inconsistent, said William Rosch III, the Houston lawyer who represents Dizona. That could lead to the case being thrown out, Rosch said.

Moreover, Rosch said Dizona scored another victory, in that the jury did not find that he knowingly provided false information to the trade publications.

"That is huge," Rosch said. "It has never happened in a trader case."

The commission released on Tuesday a statement concerning the Dizona case. However, the statement did not address the jury's rejection of the commission's key accusation.

Officials from the commission were unavailable for comment on Tuesday.

Dizona was one of six employees at Shell Trading Gas and Power sued by the CFTC. The other five defendants had settled the lawsuit by paying a $1m (€670,000) penalty.

According to the suit, Shell had a policy that prohibited employees from providing information that would distort prices. The commission accused the traders of doing just that from at least October 2001 through June 2002.

No media companies or publications mentioned in the court filings were named as defendants.

The traders reported price and volume data of purported natural-gas trades to the trade publications, the suit said.

The information provided by the traders was supposed to reflect deals made by Shell or its subsidiary, Coral Energy Resources, the CFTC said in the suit. However, the  the vast majority of the trades reported were not made by either company, according to the CFTC.

The commission accused the traders of knowingly reporting biased trade information to manipulate prices and boost Coral's revenues.

A Shell spokeswoman said the company would not comment on the suit . The suit does not make any accusations against the company.

($1.00 = €0.67)
By: Al Greenwood
+1 713 525 2653

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