Dallas, TX – Energy Transfer Partners, L.P., along with three of its subsidiaries, will pay a $10 million penalty to settle charges of attempting to manipulate natural gas prices, the U.S. Commodity Futures Trading Commission (CFTC) announced on March 17, 2008. The subsidiaries involved are Energy Transfer Company, Houston Pipeline Company, and ETC Marketing, Ltd.
The consent order, entered by Honorable Ed Kinkeade of the Northern District of Texas, permanently enjoins all defendants from engaging in similar activities and requires the joint and several payment of the $10 million civil monetary penalty.
According to the CFTC’s complaint, filed July 26, 2007, the companies attempted to manipulate prices at the Houston Ship Channel (HSC) delivery hub between September and December 2005. The alleged scheme involved selling large volumes of natural gas on the IntercontinentalExchange (ICE) to drive down prices, and then reporting those transactions to Inside FERC Gas Market Reports in an effort to influence the calculated index price of natural gas.
The CFTC alleged that this manipulation was intended to benefit the defendants’ financial basis swap positions tied to the Inside FERC October and December 2005 HSC natural gas index prices. Most of the transactions and swaps occurred on ICE.
The CFTC acknowledged the assistance of the Federal Energy Regulatory Commission and James Laurence, Assistant United States Attorney for the Northern District of Texas, in the investigation. CFTC staff members including Kathleen Banar, Kim Bruno, and others were also involved in the case.
Source: CFTC.gov
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