Posted on 02/01/2005 2:55:42 PM PST by MeneMeneTekelUpharsin
WASHINGTON (MarketWatch) - The Commodity Futures Trading Commission said Tuesday it has filed civil lawsuits against 15 natural gas traders for reporting false information on deals to industry newsletters in an attempt to manipulate market prices.The traders worked for Enserco Energy, Mirant Americas Energy Marketing (MIRKQ: news, chart, profile) , Cinergy Corp. (CIN: news, chart, profile) , Duke Energy Trading and Marketing (DUK: news, chart, profile) , CMS Field Services (CMS: news, chart, profile) , and Shell (RD: news, chart, profile) affiliate Coral Energy Resources, when they carried out these activities, the commission said in a statement.
Concord Energy, a company founded by former traders from Enserco Energy, was also charged. The commission is seeking monetary sanctions against the traders that include penalties of up to $120,000 for violations of the Commodity Exchange Act, disgorgement of profits resulting from the violations, and restitution. The commission alleged that the traders supplied fake trade volumes and prices to companies that compile indexes to try skew the indexes to benefit their company's trading positions. These indexes calculate natural gas prices for various trading hubs in the United States, which are used for price discovery and for assessing price risks.
Movement in published index prices can affect traders' profits and inflate prices that electric utilities and businesses pay for natural gas. An increase in the price at a central hub signals either stronger demand or weakened supply, impacting futures trading. Index prices also are used to price large volumes of natural gas and set royalty payments for owners of mineral rights. Mirant Americas Energy Marketing reached an agreement with the CFTC in December 2004 to pay a $12.5 million civil penalty to settle charges that it tried to manipulate natural gas markets in 2000 and 2001.
Reuters.com - No Spin. No Agenda. Just the Facts
...now that's funny!
energy traders are the "tin men" of the 21st century, they don't care if the price goes up or down, they just want it to move.
Futures trading orignated to reduce risk and stabilize prices. Does neither anymore. Most businesses have moved on to contracting their supplies directly.
I used to tell my farmers not to pay attention to the cash price on the radio because it only represented 10% of the hogs sold.
The futures market is all speculation any more, no hedgers or at least very little hedging.
The markets themselves and the trading desks are making great money as well as a few people like Hillary's old buddy in Chicago. But the rest of us are paying highest ever prices for gas and oil despite no representative increase in demand or shortage in supply.
They were picking the pockets of consumers and other users of power and natural gas, and they deserve whatever punishment is meted out to them.
You missed my point, your local utility contracted in their price of gas, they did not go on the futures board because it was too risky. As long as we understand that there are speculators on both sides of futures transaction, it has nothing to do with reality.......although we still think it does.
Yeah baby!
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