The Commodity Futures Trading Commission (CFTC) last week ordered a former natural gas trader for Oneok to pay $25,000 in civil penalties and $31,000 in restitution for his role in a fraudulent scheme to skim profits from Oneok's natural gas futures contracts trading on the New York Mercantile Exchange.
Along with the fines, the CFTC imposed a personal trading ban of one year on Hugh J. Maddox of Tulsa and has prevented him from seeking registration with the CFTC, or acting in any capacity requiring CFTC registration, for three years.
According to the order, Maddox participated in a wrongful trade allocation scheme with others against his former employer, Oneok Energy Marketing & Trading Co. LP (now known as Oneok Energy Services), between May 2003 and February 2004, which violated antifraud provisions of the Commodity Exchange Act.
Maddox, said the CFTC, entered orders to a clerk on the floor of Nymex to buy and sell natural gas futures. The order stated that Maddox then coordinated with the clerk to allocate some of the profitable trades -- that rightfully belonged to Oneok -- to Maddox and his associates, and to allocate some of the losing trades to Oneok.
According to the CFTC, Maddox and others misappropriated about $64,000. The order also found that Maddox deceived Oneok regarding the handling of its futures trading.
In consenting to entry of the order, Maddox neither admitted nor denied the CFTC findings.
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