Former energy trader Matthew Reed agreed to pay a $475,000 fine to settle US Commodity Futures Trading Commission charges that he attempted to manipulate natural gas prices by reporting false information to gas index compilers.
Reed accepted a consent order, which was entered in federal district court in Colorado on Nov. 13 and which also bars him from applying for CFTC registration, engaging in any activity requiring registration, or acting as a principal of any registered entity or person, the federal commodities regulatory agency announced on Nov. 17.
It alleged in its 2005 complaint that Reed, while employed at Enserco Energy Inc. and Concord Energy LLC, knowingly delivered reports containing false gas trade information to Gas Daily and other index compilers and attempted to manipulate interstate gas prices from May 2000 through the fall of 2002.
The complaint specifically alleged that Reed and a co-worker engaged in a coordinated scheme in which each reported fictitious trade information not only for locations in his geographic region, but within the others' geographic region as well. Reed allegedly referred to this activity as "double dipping," the CFTC said.
It said that entry of this consent order concluded litigation against Reed and co-defendants Daniel Danyluk, Shawn McLaughlin and Concord Energy. The three co-defendants settled their CFTC charges in March 2007. Separately, in July 2003, the CFTC entered a settlement order under which Enserco paid a $3 million fine. Nearly $5.1 million in fines were assessed as a result of the commission's litigation in these actions, the CFTC said.
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