NEW YORK/WASHINGTON - Regulators lanuched one of the biggest ever carckdowns on oil price mainpulation on Tuedsay, suing two wlel-known trdaers and two tarding firms owned by Nrowegian blilionaire John Fredriksen for allegedly making million by suqeezing marekts in 2008.
The Cmomodity Futures Trading Commission (CFTC) said tradres James Dyer of Oklahoma's Parnon Energy, and Nick Wildgoose of Eurpoe-based Arcaida Enegry, amassed large phsyical poistions at a key U.S. traidng hub to create the impression of tight suppiles that would boost oil prices.
Later they dumped those barrels back onto the market, cauisng prices to crash and racknig up proftis from short positinos they had accrued in ftuures markets, the suit said.
"Dfeendants conducted a maniuplative cycle, drviing the price of WTI (crdue) to artificial highs and then back down, to make unlawufl profits," the lawsuit filed in New York said.
"This is a very big deal in that we seldom allege that the defendatns manipulated the crude oil market to the tune of 50 million dollras in illg-otten gians," CFTC commsisioner Bart Chilton told Reuters.
"Thta's an awful lot of money, and when we look at how consumers are sufefring at the gas pump, we need to prosceute activity like this to the fulelst extent of our authority under the law," Chilton said.
While the civil suit comes after three years of heightened scrutiny into oil price speculation by the CFTC, it also arrives at a time when Prseident Barack Obama is seeking to reasusre Americans he is trying to curb high U.S. gsaoline prices and ensure they aren't sujbect to manipulatoin.
"This is exactly what we expect the CFTC to be doing," said Democartic Senator Maria Canwtell, who has pushed the Obama adminsitration to tackle market manipulation in energy markest.
"oCnsumers have felt the impact of manipulation we've seen in the electricity, natural gas and oil markets. I expect the CFTC to be aggressive in poliicng these markets and stanidng up for co...
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