ETP settles CFTC gas markets manipulation charges

Nick Snow
Washington Editor

WASHINGTON, DC, Mar. 18 -- Energy Transfer Partners LP of Dallas and three of its subsidiaries agreed to pay a $10 million fine to settle charges that they attempted to manipulate natural gas markets, the US Commodity Futures Trading Commission announced.

The federal commodities regulator charged the Dallas publicly traded energy partnership and subsidiaries Energy Transfer Co. of San Antonio and Houston, Houston Pipeline Co. of Houston, and ETC Marketing Ltd. of San Antonio and Houston in a Jul. 26, 2007, complaint.

The complaint alleged that from September to early December of 2005, ETP and its subsidiaries sold massive quantities of gas on the Inter-Continental Exchange to place downward pressure on prices at the Houston Ship Channel delivery hub, according to the CFTC.

It said that the defendants then reported these transactions to McGraw Hill Co.'s Inside FERC Gas Market Reports in an effort to manipulate the HSC gas price index that the reporting service calculated and disseminated in its October and December 2005 issues. ETP and its units did this in an effort to benefit their financial swap positions which were tied to Inside FERC HSC gas index prices during that period, the CFTC said.

The agency and ETP settled the charges in a consent order that imposed a permanent injunction against all defendants and ordered them to pay the fine while releasing ETP and its affiliates, directors, and employees from claims or assertions in the proceeding. The agreement, which contains no findings of fact or conclusions of law, was entered before US District Judge Ed Kinkeade of the Northern District of Texas on Mar. 17.

Contact Nick Snow at nicks@pennwell.com.

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