HOUSTON, TX – Former natural gas trader Michael Whitney was penalized $55,000 and permanently barred from certain activities in the commodities market following a settlement with the U.S. Commodity Futures Trading Commission (CFTC). The consent order, entered on March 5, 2008, by Judge Kenneth M. Hoyt of the U.S. District Court for the Southern District of Texas, resolves the CFTC’s charges against Whitney.
Whitney, a former marketing representative at Duke Energy Trading and Marketing, LLC (DETM), was accused of false reporting and attempting to manipulate natural gas prices between June 2001 and August 2002. The CFTC alleged that Whitney knowingly submitted false transaction information to Gas Daily and Enerdata, two firms that compile natural gas price indexes used to price and settle transactions in interstate commerce.
The lawsuit, originally filed on February 1, 2005, claimed Whitney’s false reports were a deliberate attempt to influence the price of natural gas. The CFTC contends that Whitney understood the impact these reported figures had on market pricing.
In addition to the $55,000 civil monetary penalty, Whitney is prohibited for four years from applying for registration with the CFTC, engaging in any activity requiring registration, or acting as a principal of any registered entity. This effectively removes him from participating in the regulated commodities markets for the duration of the ban.
The case was led by CFTC staff members Glenn I. Chernigoff, Michael J. Otten, Michael Solinsky, Gretchen L. Lowe, Richard Wagner, and Vincent A. McGonagle. The settlement brings a conclusion to the CFTC’s enforcement action against Whitney.
Source: CFTC.gov
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