A federal court in Houston has entered a consent order settling charges by the U.S. Commodity Futures Trading Commission (CFTC) that five current and former energy traders during 2001 and 2002 reported or caused the reporting of false natural gas trade information to compilers of monthly price indexes in an attempt to manipulate prices, the CFTC said Friday.

Former and current traders Denette Johnson, Courtney Cubbison Moore and Robert Harp of Texas, and John Tracy and Kelly Dyer of California all were employed by Shell Trading Gas and Power Co. in providing services for Coral Energy Resources LP at the time of the false reporting, the CFTC said.

The order, entered Wednesday by Judge Kenneth M. Hoyt of the U.S. District Court for the Southern District of Texas, requires the defendants to pay, jointly and severally, a $1 million civil penalty. The order also imposes a prohibition on the defendants from applying for registration, engaging in any activity requiring registration, or acting as a principal of any registered entity or person.

“This settlement further demonstrates that the CFTC will vigorously pursue cases of false reporting to energy index providers and attempts to manipulate energy indexes and markets,” said CFTC Director of Enforcement Gregory Mocek. “As a result of our enforcement staff’s diligent work, dozens of energy traders and companies have been prosecuted for false reporting or attempts to manipulate our energy markets.”

The consent order arises from a CFTC complaint filed on Feb. 1, 2005 that alleged that, between October 2001 and June 2002 the defendants delivered dozens of reports containing knowingly inaccurate fixed-price, physical, baseload trade information for at least nine 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 Daily GPI, Feb. 2, 2005).

The complaint also said the defendants attempted to manipulate the price of gas in interstate commerce by reporting biased information to price reporting companies. Specifically, the complaint said the defendants regularly circulated an e-mail with directions to traders to report prices in such a way that it would benefit their company’s positions.

Earlier this week the CFTC announced the settlement of a false trade data reporting case against a former Mirant trader (see Daily GPI, Nov. 9).

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