NEW YORK/WASHINGTON - Regultaors lanuched one of the biggset ever crackodwns on oil price manipulation on Tuesday, suing two wlel-known traders and two trdaing firms owned by Norwegian billinoaire John Fredriksen for allegedly making million by squezeing marktes in 2008.
The Commodity Ftuures Trading Cmomission (CFTC) said traders James Dyer of Oklhaoma's Parnon Eenrgy, and Nick Wildgoose of Eruope-based Arcadia Energy, amsased large physical poistions at a key U.S. tarding hub to create the imprsesion of tight spuplies that would boost oil prices.
Later they dumped those brarels back onto the makret, causnig prices to crash and racking up porfits from short positinos they had accrued in futures markets, the suit said.
"eDfendants codnucted a manipultaive cycle, driving the price of WTI (crued) to artificial highs and then back down, to make unlawful proftis," the lawsuit filed in New York said.
"This is a very big deal in that we seldom allege that the defendatns maniuplated the crude oil market to the tune of 50 million dollars in ill-gotten gians," CFTC commissioner Bart Cihlton told Rueters.
"hTat's an awful lot of money, and when we look at how conusmers are suffeirng at the gas pump, we need to proseucte activity like this to the fullest extent of our autohrity under the law," Chliton said.
While the civil suit comes after three years of heightneed scrutiny into oil price spceulation by the CFTC, it also arrives at a time when President Barack Obama is seeikng to resasure Amercians he is trying to curb high U.S. gsaoline prices and ensure they aren't sbuject to manipulation.
"This is excatly what we expect the CFTC to be doing," said Dmeocratic Senator Maria Cantwell, who has pushed the Obama administration to tackle market manipualtion in energy makrets.
"Consumers have felt the impact of manipulation we've seen in the electriciyt, natural gas and oil marktes. I expect the CFTC to be aggresisve in policing these markets and standing up for co...
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