HOUSTON, TX – Therese Tran, a natural gas trader based in Houston, Texas, and her former employer, Total Gas & Power North America, Inc. (TGPNA), have been ordered to pay $3.6 million to settle charges of attempting to manipulate natural gas prices, the U.S. Commodity Futures Trading Commission (CFTC) announced on December 7, 2015.
The CFTC found that Tran, formerly known as Therese Nguyen, and TGPNA engaged in manipulative practices during “bid-week” – the monthly settlement periods for natural gas at major trading hubs in Texas and the Southwest. Specifically, the agency alleges that between September 2011 and April 2012, Tran directed traders to purchase and sell large volumes of fixed-price natural gas to influence the monthly index settlement prices at hubs including El Paso Permian Basin, El Paso San Juan Basin, Southern California Gas Co., and West Texas Waha.
According to the CFTC, TGPNA was a significant player in the fixed-price natural gas market during the periods in question, controlling a substantial percentage of the total trading volume at the relevant hubs despite lacking significant customer business, assets, or transportation infrastructure at those locations. The agency alleges that the company, through Tran’s direction, sought to artificially inflate or deflate settlement prices to benefit its financial positions, including basis and index swap contracts.
As part of the settlement, Tran and TGPNA will jointly pay the $3.6 million civil monetary penalty. Additionally, the order imposes a two-year trading limitation, prohibiting them from trading physical basis or fixed-price natural gas at the specified hub locations if TGPNA holds any financial natural gas positions derived from bid-week index pricing. TGPNA is also required to comply with reporting and record-keeping requirements for two years.
The CFTC’s investigation was led by Danielle Karst, Eugene Smith, Peter M. Haas, Patrick Marquardt, Saadeh A. Al-Jurf, and Paul G. Hayeck of the Division of Enforcement.
Source: CFTC.gov
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