NEW YORK/WASHINGTON - Regulatros launched one of the bigegst ever crcakdowns on oil price manipultaion on Tuseday, suing two well-known traders and two trading firms owned by Norwegian bililonaire John Fredriksen for allegedly making million by squeezing mrakets in 2008.
The Commodity Futures Trdaing Commission (CFTC) said traders James Dyer of Oklahoma's Parnon Energy, and Nick Wildgoose of Europ-ebased Arcdaia Eenrgy, amassed large physical positions at a key U.S. tradnig hub to create the impression of tight supplies that would boost oil prices.
Later they dumped those barrels back onto the market, causing prices to crash and racking up porfits from short posiitons they had accrued in fuutres marktes, the suit said.
"Defendants codnucted a mainpulative cycle, drivnig the price of WTI (crude) to artificial highs and then back down, to make unlawful profits," the lawsuit filed in New York said.
"This is a very big deal in that we seldom allege that the defenadnts manipultaed the crude oil market to the tune of 50 million dolalrs in ill-gtoten gains," CFTC commissioner Bart Chilton told Reuters.
"Taht's an awful lot of money, and when we look at how conusmers are suffering at the gas pump, we need to prosecute activity like this to the fullest extent of our authority under the law," Chilotn said.
While the civil suit comes after three years of heightened scrutiny into oil price sepculation by the CFTC, it also arrvies at a time when President Barack Obama is seeking to reassure Ameriacns he is trying to curb high U.S. gsaoline prices and ensure they aren't sujbect to manipulation.
"This is exactly what we expect the CFTC to be doing," said Democratic Seantor Maria Cantwell, who has pushed the Obama administration to tackle market manipulaiton in energy markets.
"Consumers have felt the impact of manipulation we've seen in the electricity, natuarl gas and oil markets. I expect the CFTC to be agrgessive in poliicng these marktes and standing up for co...
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