A jury in federal court in Houston found that former Shell Trading Gas and Power Co. trader Anthony Dizona violated the Commodity Exchange Act by attempting to manipulate natural gas prices on eight separate occasions in the 2001-2002 time frame, the Commodity Futures Trading Commission (CFTC) said last week.

The verdict was based on evidence that Dizona participated in a scheme whereby traders circulated an e-mail with directions to the traders to report prices to price index publishers in such a way that it would benefit their trading positions. Following a one-week trial in which Dizona did not testify, the jury deliberated for approximately five hours before finding Dizona liable.

"Attempting to manipulate the natural gas market is a serious offense that the government will eventually uncover and prosecute with all of its resources," said CFTC Director of Enforcement Gregory Mocek. "This jury verdict demonstrates that we will do what it takes to make sure traders like Dizona are brought to justice. The energy trading community should continue to improve its compliance programs to help ensure the integrity of the commodities markets."

The jury verdict arises from a CFTC complaint filed on Feb. 1, 2005 alleging that between October 2001 and June 2002 Dizona knowingly delivered dozens of reports containing knowingly inaccurate fixed-price, physical baseload trade information for at least four natural gas pipeline locations in the western United States to compilers of natural gas monthly price indexes including Platts, a division of the McGraw-Hill Companies, and Intelligence Press Inc. (see NGI, Feb. 7, 2005).

At the time Dizona was an employee of Shell Trading Gas and Power Co., which provided services for Shell subsidiary Coral Energy Resources LP. The complaint also alleged that Dizona attempted to manipulate the price of natural gas in interstate commerce by reporting biased information to price reporting companies.

Five other defendants who were charged in the same complaint settled the charges on Nov. 9 pursuant to a consent order of permanent injunction requires the defendants to pay, jointly and severally, a $1 million civil penalty.

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