For Release: August 21, 2001
AVISTA ENERGY, INC. ORDERED TO PAY $2.1 MILLION TO SETTLE CFTC CHARGES OF MANIPULATING ELECTRICITY FUTURES
Former Company Officers and Employees and NYMEX Floor Broker also Charged with Manipulation
WASHINGTON – The Commodity Futures Trading Commission (CFTC) announced today that it filed and simultaneously settled administrative proceedings against Avista Energy, Inc. (Avista Energy), of Spokane, Washington, former Avista Energy Vice President of Trading Thomas Johns (Johns) of Spokane, Washington, and former Avista Energy trader Michael T. Griswold (Griswold) of Seattle, Washington. In the Order issued today, the CFTC finds that on four days between April 1998 and August 1998, Avista Energy manipulated the settlement prices of the Palo Verde and California-Oregon-Border electricity futures contracts traded on the New York Mercantile Exchange (NYMEX), in order to increase the company’s net gain on certain over-the-counter option positions, whose value was based on the settlement prices at issue.
The CFTC imposed cease and desist orders against Avista Energy, Griswold, and Johns, and required them to pay civil monetary penalties of $2.1 million, $110,000, and $50,000, respectively. The CFTC also imposed an 18-month trading ban on Griswold and a 12-month trading ban on Johns. The settlements require Avista Energy, Griswold, and Johns to cooperate in any further investigations and proceedings related to the conduct at issue. Avista Energy, Griswold, and Johns consented to the entry of the orders without admitting or denying the findings made in the orders.
In announcing today’s settlements, Acting Chairman James E. Newsome commented, This action demonstrates the CFTC’s continuing vigilance in its efforts to protect the nation’s futures markets from manipulation.
The CFTC also filed a ten-count complaint against former Avista Energy Vice President of Trading Strategies William H. Taylor (Taylor) of Houston, Texas, former Avista Energy trader Robert S. Kristufek (Kristufek) of Chicago, Illinois, and NYMEX floor broker Anthony J. DiPlacido (DiPlacido) of Bellmore, New York, charging them with participating in the manipulative scheme.
A public hearing will be held on the charges against Kristufek, Taylor and DiPlacido. Possible sanctions include cease and desist orders, civil monetary penalties of $110,000 per violation of the Commodity Exchange Act, or three times the monetary gain (whichever is higher), restitution, trading prohibitions and suspension, restriction or revocation of DiPlacido’s floor broker registration.
The NYMEX Compliance Department assisted the CFTC’s Division of Enforcement in its investigation.
Copies of the CFTC complaint and orders may be found at http://www.cftc.gov/
Charles J. Sgro
Regional Counsel, CFTC Division of Enforcement
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