After defense attorneys argued that they needed information that was pertinent to their case, a Houston federal judge on Monday postponed the trial of a former Dynegy Inc. trader who has been charged with wire fraud and reporting false trades.

U.S. District Judge Nancy Atlas instructed prosecutors to turn over relevant information to Michelle Valencia’s defense team and said the defense team should request any additional documentation, including phone records, they need from Dynegy.

In March, Atlas had ruled that only summary data for energy trades during 2001 had to be turned over to the defense team (see Daily GPI, March 14). At that time, the scope of the subpoena was limited, but Atlas said she could expand the information request in the future. The latest ruling has no affect on the summary data ruling.

Valencia, who faces four counts of wire fraud and three counts for false reporting, now is scheduled for trial on Sept. 8. Prosecutors allege she reported 43 false natural gas trades three times between November 2000 and February 2001 to Platt’s Inside FERC Gas Market Report, an industry newsletter (see Daily GPI, Jan. 28). The questionable trades were not included in Platt’s reports, according to the publisher’s attorneys.

Valencia’s attorneys told Atlas Monday that the case involved reviewing thousands of documented trades, telephone conversations and other evidence. Most of it still has to be gathered, they said. According to the U.S. Attorney’s office, Valencia’s attorneys have requested documents that the government apparently does not have, including all the trades Dynegy conducted with other companies between the questionable period, November 2000 through February 2001.

Prosecutors allege that the Dynegy trades are not relevant to Valencia’s case, but her attorneys argued they needed to review all of the trading activity before making that determination. On Monday, Atlas encouraged the attorneys for both sides to focus on what Valencia knew about the alleged fake trades at the time they were made.

Although Valencia’s attorneys contend that energy trades could be booked and later cancelled, Atlas countered that Valencia is alleged to have known the transactions were fake when she reported them and not whether they may have been legitimate trades that were later cancelled.

For false reporting, Valencia faces up to five years in prison and a fine of up to $500,000. For wire fraud, she faces up to five years in prison and fines up to $250,000. She is the second former trader for a Houston energy company to be indicted on false trading. Todd Geiger, a former vice president with El Paso Corp., has been charged with reporting 48 false transactions to Platt’s newsletter as well His pretrial hearing is scheduled in June, but his June 23 trial is likely to be postponed as well.

©Copyright 2003 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.