For Release: January 27, 2003
FORMER DYNEGY MARKETING & TRADE EMPLOYEE CHARGED WITH COMMODITY DECEPTION AND WIRE FRAUD
Former Natural Gas Trader Charged Criminally Under the Commodity Exchange Act With Intentionally Reporting False Natural Gas Price and Volume Information to Energy Reporting Firms in an Attempt to Affect Prices of Natural Gas Contracts
WASHINGTON D.C. - The U.S. Commodity Futures Trading Commission (CFTC) welcomed today’s announcement by the Office of the United States Attorney for the Southern District of Texas, Houston Division, of a federal indictment charging Michelle Valencia, a former Senior Trader at Dynegy Marketing & Trade (Dynegy), with three counts of false reporting under the Commodity Exchange Act. Additionally, Valencia was charged with four counts of wire fraud.
The indictment follows Dynegy’s December 18, 2002, resolution of a civil enforcement action with the CFTC involving false reporting and attempted manipulation, among other things, (see CFTC News Release 4728-02, December 19, 2002). The CFTC settlement order in that action found that, from at least January 2000 through June 2002, Dynegy and another firm, West Coast Power LLC, reported false natural gas trading information, including price and volume information, to certain reporting firms. The order also found that Dynegy knowingly submitted false information to the reporting firms in an attempt to skew those indexes for Dynegy’s financial benefit. Dynegy paid a civil monetary penalty of $5 million to settle the action, and agreed to other CFTC sanctions, including a requirement that it cease and desist from further violations of the Commodity Exchange Act and Regulations and comply with undertakings, including cooperation with the CFTC in its continuing investigation of false reporting and related matters.
Media Case Contacts:
Director of CFTC Division Enforcement, Washington, DC
Regional Counsel, New York Regional Office
CFTC Division of Enforcement
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