US CFTC fines energy traders
The U.S. Commodity Futures Trading Commission ordered TOTSA TotalEnergies Trading SA on August 27 to pay a fine of $48 million for alleged gasoline price manipulation.
Ian McGinley, CFTC Director of Enforcement, said that the CFTC had "guarded the integrity of the market in numerous cases during the past 20 years" by detecting these benchmark-related scheme and prosecuting them.
The U.S. regulator has fined several companies for what they call oil and gas market malpractice. Here are some examples.
TotalEnergies:
The CFTC fined TOTSA $48 million in March 2018 for attempted market manipulation.
TOTSA held a short position on the Eurobob gasoline derivatives market while flooding the physical markets that support the derivatives contract with supplies it was trying to sell below the buyers' indicative bid level.
In 2015, Total's North American unit and a trader paid $3.6 million in settlement of charges of attempted market manipulation on the U.S. Natural Gas Market.
Vitol:
In August 2024 the commodity trading house Vitol will pay $500,000 as a settlement with the CFTC for exceeding the position limits on certain exchange traded oil and cattle contracts in 2022.
Vitol has agreed to pay $95.7m in 2020 to settle charges of attempted market manipulation and corruption. The CFTC determined that Vitol paid bribes to agents and employees of state-owned companies in Brazil, Ecuador and Mexico to gain "preference treatment and access to trading".
In 2010, Vitol agreed to pay $6 million as a settlement to charges that it had failed to disclose important facts to the New York Mercantile Exchange. This was due to the close relationship between Vitol Group's Houston division and Vitol Group affiliate Vitol Group Capital Management Ltd.
Trafigura:
In June 2024 a U.S. unit of commodity trading company Trafigura will pay $55 million to settle charges of fraud and manipulation, as well as preventing whistleblowers from communicating.
Trafigura Trading LLC, based in Houston, violated U.S. laws and regulations between 2014 and 2019. They traded gasoline using materially non-public information and they manipulated an oil price benchmark.
Freepoint Commodities
Freepoint Commodities LLC, a Connecticut-based company, agreed to pay $98 million in late-2023 as a settlement to charges related to a scheme involving the misappropriation of material non-public data and bribery of officials in Brazil from 2012 to 2018.
Glencore:
The CFTC fined global commodities trading company Glencore $1.186 billion for "manipulative conduct and deception" in the U.S. oil market and other global markets between 2007-2018, which included four U.S. benchmarks of physical oil and futures and swaps related to them.
Glencore announced at the time that it would pay up to $1,5 billion to settle investigations in Brazil and Britain, as well as the United States.
Equinor:
Equinor (then known as Statoil), the state-owned oil company of Norway, announced in 2017 that it would pay a settlement to the CFTC for $4 million after it was found guilty in 2011 of attempting to manipulate the Argus Far East Index which determines propane prices.
Arcadia:
In 2014, the now-defunct oil trader Arcadia and two traders agreed to pay $13m and accept a three-year trading limit for U.S. benchmark Crude in a price-manipulation lawsuit relating to trading activity in 2008
Panther Energy Trading
The CFTC fined Panther Energy Trading LLC, a high-frequency trading outfit in the United States, and its owner Michael Coscia $2.8M for using a computer algorithm "designed to illegally place bids and offer contracts and cancel them quickly," including contracts for U.S. Light Sweet Crude Oil on the Chicago Mercantile Exchange and natural gas contracts.
Morgan Stanley:
Morgan Stanley, a major investment bank, was fined 14 million dollars in 2010 after it delayed reporting a large block of oil trade until the market closed.
Energy Transfer Partners:
The CFTC received a $10,000,000 fine in 2008 from Energy Transfer Partners, Inc. and its three subsidiaries as part of a settlement with the CFTC relating to a CFTC case involving a CFTC complaint pertaining to a CFTC investigation relating to a CFTC claim pertaining to a CFTC lawsuit relating to a CFTC allegation arising out of a CFTC suit relating to a CFTC charge arising out of
BP has agreed to pay a settlement of $303 million dollars to the CFTC for manipulating U.S. propane market.
The CFTC alleged BP cornered TET Propane in February 2004 and tried a similar maneuver in April 2003.
Marathon Petroleum:
Marathon Petroleum paid a $1,000,000 civil penalty in 2007 to settle CFTC charges over the attempted manipulation of U.S. West Texas Intermediate crude spot prices in Nov. 2003.
Enron:
Enron Corp. announced in 2004 that it would pay $35 million in civil penalties to settle allegations of manipulating the U.S. Natural Gas Market in 2001. (Reporting and editing by Barbara Lewis; Robert Harvey)
(source: Reuters)
