New York, NY – May 24, 2011 – The U.S. Commodity Futures Trading Commission (CFTC) today filed a civil enforcement action against James T. Dyer, a citizen of Australia, and Nicholas J. Wildgoose of California, alleging they unlawfully manipulated New York Mercantile Exchange (NYMEX) crude oil futures prices between January and April 2008. The case was filed in the United States District Court for the Southern District of New York.
According to the CFTC complaint, Dyer and Wildgoose, acting on behalf of Parnon Energy Inc., Arcadia Petroleum Ltd., and Arcadia Energy (Suisse) SA, engaged in a manipulative trading cycle involving West Texas Intermediate (WTI) crude oil. WTI, delivered to Cushing, Oklahoma, is a key benchmark for global crude oil pricing.
The alleged scheme involved purchasing large quantities of physical WTI crude oil despite lacking a legitimate commercial need. This was done to artificially inflate the price of WTI and profit from corresponding gains in WTI futures and options contracts. Once prices reached artificial highs, the defendants allegedly short-sold WTI derivatives and strategically offloaded their physical WTI holdings, driving prices down to profit from their short positions. This cycle occurred in January and March 2008, with an attempted repetition in April 2008.
The CFTC claims the defendants realized profits exceeding $50 million through this manipulative activity. Dyer and Wildgoose are charged with violating Sections 6(c), 6(d), and 9(a)(2) of the Commodity Exchange Act. The liability of the corporate entities, Parnon, Arcadia Petroleum, and Arcadia Suisse, is tied to the alleged actions of their agents and employees, including Dyer and Wildgoose, according to Section 2(a)(1)(B) of the Act.
The CFTC is seeking permanent injunctions, disgorgement of ill-gotten gains, restitution, trading and registration bans, civil monetary penalties, and other appropriate relief. The Commission acknowledged assistance from the Financial Services Authority of the United Kingdom and the Australian Securities & Investments Commission in the investigation.
Source: CFTC.gov
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