Natural gas traders plead guilty
to price manipulation charge
By Julia Cheever, Bay City News Service
June 20, 2006
SAN FRANCISCO (BCN) - Three natural gas traders pleaded
guilty in federal court in San Francisco yesterday to conspiring
to manipulate prices by reporting fictitious trades during the
state's energy crisis in 2000.
The traders are Paul Atha, 39, of Houston, and Christopher McDonald,
38, of Atlanta, both of whom worked for Atlanta-based Mirant Corp.
at the time, and Michael Whalen, 36, of Houston, who worked for
Cincinnati-based Cinergy Corp.
The three men admitted in written plea agreements that they conspired
to report fictitious trades to an industry newsletter, "Inside
FERC," from July through October 2000.
They said the purpose was to attempt to skew the published index
prices of natural gas in directions that would benefit their companies'
positions in the market.
They entered their guilty pleas before U.S. District Judge Marilyn
Patel and will be sentenced on Oct. 23.
The maximum possible penalty for the conspiracy to manipulate
the price of a commodity is five years in prison, but the actual
sentence will be determined after consideration of federal sentencing
U.S. Attorney Kevin Ryan said, "The false data these traders
provided to an industry newsletter skewed published prices so
the company could illegally profit.
"This continuing investigation should send a message to
traders and companies that they can be held criminally accountable
for illegally manipulating data," Ryan said.
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