Dallas News: El Paso Corp. employees investigated for price manipulation, sources say: “$250 million in penalties, including $20 million from Houston-based El Paso and $30 million from Coral Energy Resources, a Houston-based trading subsidiary of Shell.” (ShellNews.net)
Associated Press
Posted 14 August 04
HOUSTON – A grand jury investigation into natural gas price manipulation reportedly targets as many as 10 former El Paso Corp. employees.
Sources familiar with the investigation told the Houston Chronicle in Wednesday's editions that the former gas traders and supervisors of the nation's largest natural gas pipeline company received target letters from the U.S. Attorney's Houston office informing them they may face charges of commodity price manipulation, conspiracy and wire fraud.
The sources, who spoke on condition of anonymity, said the ex-employees were told they have until Aug. 20 to contact prosecutors to begin discussing pleas in the case.
In December, a former El Paso Corp. trader pleaded guilty to reporting fake trades to an industry publication that uses the data to calculate the index price of natural gas. The ex-trader, Todd Geiger, agreed to cooperate with prosecutors in their ongoing investigation.
Possible charges in the latest investigation are nearly identical to those brought against Todd Geiger, according to the report.
In the past two years, the Commodity Futures Trading Commission has filed civil charges against several companies, claiming their traders knowingly provided false data to publications with the intention of influencing natural gas prices. The commission collected a total of about $250 million in penalties, including $20 million from Houston-based El Paso and $30 million from Coral Energy Resources, a Houston-based trading subsidiary of Shell.
The government's investigation, which relates to natural gas price indexes, started more than 11/2 years ago. The indexes offer snapshots for locations, or hubs, nationwide and are used by buyers and sellers of natural gas to help set prices in contracts.
Target letters, which began arriving via mail and fax on Friday afternoon, were a surprise to former El Paso employees and their defense attorneys.
A judge ruled last summer that the part of the Commodity Exchange Act used to charge Geiger and Michelle Valencia, a former Dynegy Inc. trader who faced similar accusations, was overly broad and unconstitutional. The judge, who threw out some charges against the two, later allowed prosecutors to reinstate the charges on a narrower basis.
http://www.dallasnews.com/s/dws/bus/tv/stories/081104dnbuselpaso.2c036.html