Washington, D.C. – Former BP Products North America Inc. gasoline trader Paul K. Kelly has been penalized by the U.S. Commodity Futures Trading Commission (CFTC) for attempting to manipulate gasoline futures contracts, the agency announced today, October 25, 2007.
Kelly, who was responsible for securing gasoline supplies for BPPNA’s northeast commercial operations, was found to have engaged in manipulative trading practices on October 31, 2002. The CFTC order details that Kelly attempted to influence the price spread between the November and December 2002 unleaded gasoline futures contracts traded on the New York Mercantile Exchange (NYMEX).
At the time, the market was experiencing a gasoline shortage, and BPPNA already held a substantial position in November 2002 contracts, exceeding its stated commercial needs. Despite this, Kelly purchased an additional 720 November 2002 unleaded gasoline contracts on the last day of trading for that contract, allegedly with the intent to manipulate the price spread.
The CFTC determined that Kelly’s actions constituted a deliberate effort to affect the market price. As a result, Kelly has been assessed a $400,000 civil monetary penalty. Furthermore, the order prohibits Kelly from applying for registration with the CFTC, engaging in any activity requiring registration, or acting as a principal of any registered entity or person.
The CFTC acknowledged the assistance of the New York Mercantile Exchange in the investigation. The case was led by CFTC Division of Enforcement staff members John W. Dunfee, Paul G. Hayeck, Joan M. Manley, Lael Campbell, Mary Kaminski, and Ed Riccobene. Kelly’s last known location was Illinois.
Source: CFTC.gov
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