For Release: November 9, 2007
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) announced today that a federal court in Houston, Texas entered a consent order settling charges by the CFTC that defendants Denette Johnson, Courtney Cubbison Moore, and Robert Harp of Texas and John Tracy and Kelly Dyer of California, reported or caused to be reported false natural gas trade information to compilers of natural gas monthly price indexes in an attempt to manipulate natural gas prices.
The order, entered on November 7, 2007, by the Honorable Kenneth M. Hoyt of the U.S. District Court for the Southern District of Texas, requires the defendants to pay, jointly and severally, a $1 million civil monetary penalty. The order also imposes a prohibition on the defendants from applying for registration, engaging in any activity requiring registration, or acting as a principal of any registered entity or person.
“This settlement further demonstrates that the CFTC will vigorously pursue cases of false reporting to energy index providers and attempts to manipulate energy indexes and markets. We will continue to use our professional resources and expertise to uncover and pursue claims of trading misconduct in the energy markets,” said CFTC Director of Enforcement Gregory Mocek. “As a result of our enforcement staff’s diligent work, dozens of energy traders and companies have been prosecuted for false reporting or attempts to manipulate our energy markets.”
The consent order arises from a CFTC complaint filed on February 1, 2005 (see CFTC Press Release 5045-05, February 1, 2005). The complaint alleged that, between October 2001 and June 2002, defendants knowingly delivered dozens of reports containing knowingly inaccurate fixed-price, physical, baseload trade information for at least nine natural gas pipeline locations in the Western United States to compilers of natural gas monthly price indexes including Platts, a division of the McGraw-Hill Companies, and Intelligence Press, Inc.
The complaint also alleged that defendants attempted to manipulate the price of natural gas in interstate commerce by reporting biased information to price reporting companies. Specifically, the complaint alleged that defendants regularly circulated an e-mail with directions to the traders to report prices in such a way that it would benefit their positions.
As charged, all of these activities occurred while the defendants were employed by energy company Shell Trading Gas and Power Company in providing services for Coral Energy Resources, L.P.
The following CFTC staff members were responsible for this case: Joseph Konizeski, John Dunfee, Tracey Wingate, Mary Kaminski, Luke Marsh, Joan Manley, and Paul Hayeck.
Last Updated: November 8, 2007