Former natural gas traders Michelle Valencia and Greg Singleton — convicted earlier this month of wire fraud related to the reporting of false trade data to industry publications (see Daily GPI, Aug. 7) — are seeking acquittal or a new trial.
Former Dynegy Inc. trader Valencia was convicted of seven counts and former El Paso Energy trader Singleton was convicted of one count of wire fraud in a hard-fought split verdict that bewildered defense attorneys. The four-week trial involved prices and trade data submitted to Inside FERC’s Gas Market Report and Natural Gas Intelligence (NGI).
In his motion, filed Tuesday in U.S. Southern District Court of Texas, Valencia attorney Chris Flood says that five of the counts on which Valencia was convicted relate to data submitted to Inside FERC for its Southern California index. However, none of Valencia’s trades that were introduced as evidence settled on the Inside FERC index. Flood maintains that testimony by a government witness that some trades settled on the Inside FERC index is false. Flood also asserts that “…there is no evidence of any arguable harm or intent to harm from such reporting” related to the five counts.
On another count, Flood argues that there is insufficient evidence to prove that Valencia “fabricated or reported this list of trades” for Inside FERC’s San Juan index as another trader “…was responsible for writing out the trades to be sent in regarding San Juan.” Further, Flood argues, Valencia would not have benefited from a “higher” San Juan index, as is alleged by prosecutors, as she was a net buyer of gas at San Juan for the period in question.
Finally, one count on which Valencia was convicted involved false reporting to NGI. Flood is challenging this conviction because he says Valencia reported trades that were representative of the market, which he says would be permissible under a legal interpretation of how NGI gathered market information at the time.
In his motion for a new trial, Flood challenges testimony by government witness Matthew O’Loughlin, claiming his expert witness evidence was supplemented mid-trial with false information in an attempt by the government to preserve Inside FERC-related counts against Valencia. Specifically, Flood says O’Loughlin falsely claimed that Dynegy trades were settled on the Inside FERC Malin index when they were not.
The only count on which Singleton was convicted involved a data submission to NGI. Singleton attorney Paul Nugent in his appeal makes the same argument as Flood against Valencia’s NGI-related conviction. He also maintains that the e-mail in question does not constitute a “false material representation” because a government witness testified that it had “no price effect on the volume weighted average.”
Valencia and Singleton are free on bond while they await sentencing in the court of U.S. District Judge Nancy Atlas Nov. 7.
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