Staff of the Federal Energy Regulatory Commission's (FERC) Office of Enforcement (OE) said it has preliminarily determined that National Energy & Trade LP violated FERC's Prohibition of Natural Gas Market Manipulation "by fraudulently trading physical basis at Texas Eastern M3 (Tetco M3) during the January 2012 bidweek to increase the value of its financial basis position." OE staff alleges that Houston-based National Energy sold physical basis at Tetco M3 at arbitrarily low prices early in the morning to benefit a large short financial basis position acquired before bidweek, a large part of which it repurchased after making its physical basis sales. Staff also alleges that National Energy fraudulently traded physical basis at Henry Hub during the April 2014 bidweek to increase the value of its financial exposure, by trading physical basis after the close of the NYMEX solely to benefit its exposure to the Henry Hub Inside FERC index.
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