Denver, Colorado – Darrell Danyluk was penalized $350,000 by the U.S. Commodity Futures Trading Commission (CFTC) for falsely reporting natural gas information in an attempt to manipulate prices, according to a consent order entered on March 12, 2007, in the U.S. District Court for the District of Colorado.
The CFTC alleged that from at least May 2000 to the summer of 2002, while employed at Enserco Energy, Inc., Danyluk, along with co-defendant Matthew Reed, reported false, misleading, or inaccurate natural gas trade information to price index compilers, including Gas Daily. The purpose of this false reporting was to benefit their trading positions.
Shawn McLaughlin, Executive Vice President of Enserco and supervisor of Danyluk and Reed, was also charged with false reporting of natural gas trade data on at least one occasion. He was also cited for aiding and abetting the scheme, and for being a controlling person liable for the actions of Danyluk and Reed. McLaughlin faced a $450,000 penalty.
The case originated from a complaint filed by the CFTC on February 1, 2005, against Concord Energy, LLC, McLaughlin, Danyluk, and Reed. Concord Energy was also named in the settlement, receiving a penalty of $800,000, and was accused of knowingly reporting false natural gas trading information from July 2002 through October 2002. McLaughlin founded Concord Energy in June 2002.
“The engine that drives our enforcement program is the pursuit of illegal conduct,” stated Gregory Mocek, the CFTC’s Director of Enforcement. “These cases should put traders on notice that physical, financial, and futures markets can be interrelated, and any illegal off-exchange conduct that tends to affect futures will not be tolerated.”
The CFTC’s litigation against the remaining defendant, Matthew Reed, is ongoing. The case was handled by Theodore Joseph Dowd, II, Joseph F. Vargyas, Glenn Chernigoff, Michael Solinsky, Gretchen L. Lowe, Richard B. Wagner, and Vincent A. McGonagle of the Commission’s Division of Enforcement.
The settlement includes registration sanctions against both Danyluk and McLaughlin, effectively barring them from participating in certain CFTC-regulated activities.
Source: CFTC.gov
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