For Release: March 14, 2007
Washington, D.C.— The U.S. Commodity Futures Trading Commission (CFTC) announced today the settlement of charges against defendants Concord Energy, LLC, Shawn McLaughlin, and Darrell Danyluk for falsely reporting natural gas information in an attempt to manipulate natural gas prices.
On March 12, 2007, U.S. District Judge Wiley Daniel of the U.S. District Court for the District of Colorado entered consent orders imposing civil monetary penalties of $350,000 against Danyluk, $450,000 against McLaughlin, and $800,000 against Concord Energy, LLC. The orders also subject McLaughlin and Danyluk to registration sanctions.
The consent orders arise out of the complaint filed by the CFTC on February 1, 2005, against Concord, McLaughlin, Danyluk, and Matthew Reed (see CFTC News Release 5045-05, February 1, 2005). The CFTC complaint alleged that, from at least May 2000 to the summer of 2002, while employed at Enserco Energy, Inc. (Enserco), Danyluk and co-defendant, Matthew Reed, reported false, misleading or knowingly inaccurate natural gas trade information to various price index compilers, including Gas Daily, to benefit trading positions.
McLaughlin, who was the Executive Vice President of Enserco and supervised the other defendants, was also charged with the false reporting of natural gas trade data on at least one occasion, aiding and abetting, and as a controlling person liable for the acts of Danyluk and Reed at Enserco.
The CFTC complaint charged Concord and defendant Reed with knowingly reporting false, misleading and knowingly inaccurate natural gas trading information, including price and volume information, to firms that compile natural gas price indexes for the period July 2002 through October 2002. McLaughlin, in conjunction with other Enserco employees, founded Concord in June 2002 as a natural gas trading and marketing company.
The engine that drives our enforcement program is the pursuit of illegal conduct. Over the past five years, we investigated hundreds of leads in this sector, which resulted in enforcement actions against 55 companies and energy traders for wash trading, false reporting, attempting to manipulate, or actually manipulating the energy markets. These cases should put traders on notice that physical, financial, and futures markets can be interrelated, and any illegal off-exchange conduct that tends to affect futures will not be tolerated, said the CFTC’s Director of Enforcement, Gregory Mocek.
The Commission’s litigation against the remaining defendant Reed continues.
The following Division of Enforcement staff was responsible for this case: Theodore Joseph Dowd, II, Joseph F. Vargyas, Glenn Chernigoff, Michael Solinsky, Gretchen L. Lowe, Richard B. Wagner, and Vincent A. McGonagle.
Last Updated: July 25, 2007