Former trader admits to manipulating natural gas
prices during California energy crisis
By Julia Cheever, Bay City News Service
June 10, 2006
SAN FRANCISCO (BCN) - A former trader with Oklahoma-based
Williams Power Co. pleaded guilty in federal court in San Francisco
yesterday to participating in a conspiracy to manipulate natural
gas prices between 1998 and 2002.
The time period of the manipulation admitted to by Daryl Brown,
36, of Oklahoma, includes the era of California's energy crisis
in 2000 and 2001.
U.S. Attorney Kevin Ryan said Brown admitted during the plea
that he conspired with others to report fictitious trades to two
The fictitious reports had the effect of manipulating published
index prices and thus increasing the profits of Williams Power
Ryan said, "Mr. Brown admitted that approximately 75 percent
of the trades he reported to industry newsletters were deliberately
These false data skewed published prices so the company could
Brown, who agreed to cooperate in an ongoing probe of natural
gas price manipulation, will be sentenced by Illston on Sept.
Brown is the third former Williams trader to plead guilty to
similar charges since 2004.
In a separate agreement reached with the Justice Department in
February, Williams Power Co. promised to pay a $50 million penalty
to the U.S. Treasury, took responsibility for its employees' actions
and pledged to cooperate in the investigation.
Under that pact, known as a deferred prosecution agreement, the
Justice Department will not file criminal charges against the
company during a 15-month period if Williams complies with the
terms of the agreement during that time.
Williams Power Co., formerly known as Williams Energy Marketing
& Trading Co., is a subsidiary of The Williams Companies,
based in Tulsa, Okla.
Ryan said, "This continuing investigation should send a
message to traders and companies that they can be held criminally
accountable for illegally manipulating data."
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