US fines natgas trader $475,000 for false prices

17 November 2008 17:27  [Source: ICIS news]

HOUSTON (ICIS news)--The US futures market regulator said on Monday it has obtained a $475,000 (€380,000) civil judgment against former trader Matthew Reed for reporting false natural gas prices to industry publications, including Gas Daily.

The Commodity Futures Trading Commission (CFTC) had launched a case against Reed and a number of other traders in February 2005 over a scheme in which they reported false prices in order to manipulate indexes that would appear in a various publications.

The case also involved Reed's former employer Enserco Energy as well as Concord Energy, a company created by former Enserco traders.

The CFTC said that between May 2000 and late 2002, while Reed was employed at Enserco and at Concord, he and a co-worker engaged in a scheme in which they each reported fictitious trades for not only their own geographic region, but for each other's region as well.

In 2007, the CFTC had won penalties of $450,000 against Shawn McLaughlin and of $350,000 against Darrell Danyluk, Reed's co-defendants in the case. It also won a penalty of $800,000 against Concord.

Enserco had been penalised $3m in July 2003 in the same case.

Chemical sector leaders have campaigned vociferously for greater steps to fight manipulation in markets for natural gas, the US industry's primary feedstock source.

($1 = €0.80)

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By: Stephen Burns
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