New York, NY – April 19, 2012 – Randal Meijer, along with Bastiaan van Kempen and Christopher Dowson, were penalized by the U.S. Commodity Futures Trading Commission (CFTC) today for their involvement in a manipulative trading scheme targeting oil and gas futures contracts. The CFTC secured a federal court consent order requiring a combined $14 million in penalties and disgorgement from Optiver Holding BV, its subsidiaries Optiver US, LLC and Optiver VOF, and the three individuals.
The charges stem from activity in March 2007, where the defendants allegedly manipulated New York Mercantile Exchange (NYMEX) Light Sweet Crude Oil, New York Harbor Heating Oil, and New York Harbor Gasoline futures contracts. The CFTC complaint detailed at least 19 attempts to manipulate prices, with five instances resulting in artificial price levels.
The scheme, known as “banging the close” or “marking the close,” involved accumulating large positions in Trading at Settlement (TAS) contracts – contracts priced based on the NYMEX closing price – and then offsetting those positions with futures contracts just before and during the closing period. This was done with the intent of artificially influencing prices to benefit the defendants.
Further exacerbating the violations, Optiver and van Kempen allegedly made false statements to NYMEX compliance officials during an inquiry into the trading activity, attempting to conceal the manipulative scheme.
Under the consent order, entered by Chief Judge Loretta A. Preska of the U.S. District Court for the Southern District of New York, the defendants will pay a $13 million civil monetary penalty and $1 million in disgorgement. Additionally, trading limitations were imposed on Optiver, and Dowson, Meijer, and van Kempen were banned from trading commodities for 8, 4, and 2 years, respectively.
“The CFTC will not tolerate traders who try to gain an unlawful advantage by using sophisticated means to drive oil and gas futures prices in their favor,” stated David Meister, Director of the CFTC’s Division of Enforcement. The CFTC also acknowledged the assistance of NYMEX, whose surveillance program detected the suspicious trading and contributed to its cessation.
Source: CFTC.gov
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