For Release: March 22, 2007
Washington, D.C.— The U.S. Commodity Futures Trading Commission (CFTC) announced today that a federal court in Colorado entered a consent order settling charges by the CFTC that defendant Andrew K. Richmond of Superior, Colorado, caused traders under his supervision at Western Gas Resources, Inc., his former employer, to report false natural gas trade information to Gas Daily, a compiler of natural gas daily and monthly price indexes, in an attempt to manipulate natural gas prices.
The order, which was entered on March 20, 2007, by the Honorable Phillip S. Figa of the U.S. District Court for the District of Colorado, requires Richmond to pay a $60,000 civil monetary penalty. The order also permanently prohibits Richmond from applying for registration, engaging in any activity requiring registration, or acting as a principal as defined by the National Futures Association, and from directly or indirectly trading on or subject to the rules of any registered entity.
“Previous investigations such as this one have shed light on published cash commodity indexes that are used as vehicles of price discovery. Traders should not take comfort over the fact that such indexes are unregulated on a day-to-day basis because supplying bogus information to an index compiler is ultimately a violation of federal law that we will pursue,” said Gregory Mocek, CFTC Director of Enforcement.
The consent order, which arises from a CFTC lawsuit filed on April 12, 2005 (see CFTC News Release 5068-05, April 14, 2005), finds that, between April 2000 and February 2001, Richmond pressured traders he supervised to submit false natural gas trading information, including fabricated price and volume information, to Gas Daily in order to benefit certain positions held by Western. In addition, the consent order finds that at least two traders that Richmond supervised submitted false trade information to Gas Daily.
The following CFTC staff members were responsible for this case: Michael J. Otten, Judy T. Lee, Lacey Dingman, Gretchen L. Lowe, and Vincent A. McGonagle.
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To date, the CFTC’s recent efforts to address alleged wrongdoing in the energy markets have resulted in the filing of 35 enforcement actions charging a total of 55 respondents/defendants (31 companies and 24 individuals). The CFTC has obtained $307,073,500 in civil monetary penalties in settlement of these enforcement actions. Six CFTC energy market-related enforcement actions remain pending (still in litigation). Complementing its direct enforcement action, the CFTC has also achieved great success in the energy markets enforcement area by working cooperatively with the Department of Justice (DOJ); since 2002, the DOJ has filed 18 criminal cases in addressing energy markets misconduct as part of this cooperative effort. For more information, contact the CFTC’s Office of External Affairs, 202-418-5080.
Last Updated: July 25, 2007