A former trader for BP Energy Co. accused for six illegal “wash” trades between April and June 2000 has settled with the Commodity Futures Trading Commission (CFTC) for $30,000. Byron G. Biggs, who did not admit or deny the findings, was employed as a power trader by BP from 1999-2003.

According to the CFTC, Biggs allegedly executed prearranged trades for electricity contracts at identical prices for BP Energy, the marketing arm of BP plc’s Gas, Power and Renewables unit. The CFTC also alleges that Biggs agreed to execute a buy or sell order on the electronic trading platform and then immediately reverse the transaction, which resulted in a financial nullity, or a “wash” trade.

The order, issued on Wednesday, found that because Biggs caused prices to be recorded on the electronic trading platform that were not true and bona fide, the transactions resulted in the reporting of non-bona fide prices. The order directs Biggs to cease and desist from further violations, pay a $30,000 civil penalty, and cooperate with the CFTC in its ongoing investigations.

In related news, as many as 10 former El Paso Corp. employees apparently have received target letters from the U.S. Attorney’s Office in Houston informing them they may be charged with commodity price manipulation, conspiracy and wire fraud. The report, which quotes unidentified sources in several newspapers, including The Wall Street Journal, indicates that the letters were sent to former traders and supervisors. The sources said the former employees would have until Aug. 20 to contact prosecutors to discuss pleas. The U.S. Attorney’s office could not comment on the report.

Last year, Todd Geiger, a former El Paso vice president and energy trader, agreed to cooperate with investigators after pleading guilty to manipulating gas price indexes (see Daily GPI, Dec. 12, 2003). Geiger, a Houston resident, had traded for El Paso’s Canada desk, and allegedly fabricated 48 gas trades at the Sumas hub and provided false prices and volumes during one trading period in 2001.

Also on Wednesday, the CFTC released an enforcement advisory detailing cooperative factors in determining the appropriate level of sanctions to impose or approve in enforcement actions. The five-page advisory, whose purpose is to assist prospective respondents and their counsel with possible settlement positions, details three broad categories of cooperation, identifies several factors within each category by which cooperation may be measured, and notes several additional issues that lend weight or perspective to the cooperation factors.

The three areas of corporate conduct involve the company’s good faith in uncovering and investigating misconduct; cooperation with the CFTC staff in reporting the misconduct and the company’s actions with respect to it; and efforts to prevent future violations. Additional factors include details about the corporate structure, nature of the misconduct, harm caused, and various other factors.

The complete advisory is on the CFTC web site at www.cftc.gov/files/enf/enfcooperation-advisory.pdf.

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