MIRANT AMERICAS ENERGY MARKETING, L.P. SETTLES FEDERAL CHARGES OF FALSE REPORTING AND ATTEMPTED MANIPULATION
U.S. Commodity Futures Trading Commission Imposes Civil Penalty of $12.5 Million and Orders Energy Firm to Cease and Desist from Further Violations
Respondent Found to Have Knowingly Made False Reports to Gas Daily, Inside FERC and Natural Gas Intelligence
WASHINGTON, D.C. - The Commodity Futures Trading Commission (CFTC) announced today the issuance of an administrative order instituting and simultaneously settling charges under the Commodity Exchange Act (CEA) of attempted manipulation and false reporting against respondent Mirant Americas Energy Marketing LP (Mirant Americas), a wholly owned, indirect subsidiary of Mirant Corporation, based in Atlanta, Georgia, and assessing a civil penalty of $12.5 million.
The order finds that, from January 2000 through December 2001, Mirant Americas knowingly reported to price compilers Gas Daily, Inside FERC and Natural Gas Intelligence certain false, misleading and knowingly inaccurate information concerning natural gas transactions purportedly executed by Mirant Americas.
The order also finds that, from January 2000 to October 2000, certain Mirant Americas west region traders knowingly delivered false, misleading or knowingly inaccurate reports in an attempt to manipulate the price of natural gas by skewing the indexes to benefit its trading positions in the physical marketplace. According to the order, the false reports submitted by Mirant Americas included false price, volume, and/or counterparty information concerning natural gas cash transactions, as well as information concerning fictitious trades, and/or trades observed in the market.
The order finds that price and volume information is used by price compilers to calculate published indexes of natural gas prices for various natural gas hubs throughout the United States. The order further states that natural gas futures traders refer to the published indexes for price discovery and for assessing price risks. According to the order, the attempted manipulation of the price of natural gas by Mirant Americas traders, if successful, could have affected prices of New York Mercantile Exchange natural gas futures contracts.
The order notes Mirant America’s cooperation in the Commission’s investigation.
The order requires Mirant Americas to cease and desist from further violations of the false reporting and manipulation provisions of the CEA and imposes a civil monetary penalty of $12.5 million. The order also requires Mirant Americas and its parent, Mirant Corporation, to comply with undertakings, including an undertaking to continue to cooperate with the CFTC in this and related matters.
In consenting to the entry of the order, Mirant Americas neither admitted nor denied the findings in the order.
A copy of the CFTC order may be found at www.cftc.gov.
This case reflects the work of the following individuals: Allison Lurton, Kathleen M. Banar, Maura Viehmeyer, Lacey Dingman, Laura Gardy, Judy T. Lee, Michael Solinsky, Gretchen L. Lowe, Richard B. Wagner, and Vincent McGonagle.
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