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Finally

fff

Well-known member
U.S. charges Dutch company with oil price manipulation

By Kevin G. Hall | McClatchy Newspapers

Facing congressional criticism that speculators are driving up oil prices, the Commodity Futures Trading Commission (CFTC) on Thursday announced that it has charged the Dutch company Optiver Holding BV and its American subsidiary with manipulating the trading of contracts for future delivery of oil and gasoline.

In e-mails and phone conversations released by CFTC, Optiver's heads of U.S. and global trading talk about how they are able to "bully the market" and use similar references like "whack" or "push" or "move" the futures market.

"Today's action lets the marketplace know that the (CFTC's) Division of Enforcement has a zero tolerance policy when it comes to gamesmanship," Stephen Obie, the agency's new acting head of enforcement, said at a news conference announcing the market manipulation charges.

Obie said the agency did not know how much Optiver's actions had caused the price of oil to rise. In a preliminary report issued earlier this week, a Bush administration inter-agency task force led by the CFTC said it believes that supply and demand fundamentals remain the best explanation for soaring prices.

But Thursday's action provides ammunition to critics who insist that the lack of transparency in oil markets makes possible a wide range of practices that drive up oil prices, which in turn drive up the price motorists pay for gasoline.

The CFTC brought charges against Bastiaan van Kempen, a Dutch national who was chief executive office of Chicago-based Optiver US LLC. It also charged Christopher Dowson, a Briton who was head of trading in Chicago at Optiver, and Randal Meijer, who oversaw trading for the main Optiver holding company and all its subsidiaries.

In a series of phone recordings and emails obtained by CFTC enforcement officials, the executives weigh how far they can push their attempts to "bang the close" of market trading and still avoid detection by regulators. They then allegedly sought to cover up their scheme once confronted by officials at the New York Mercantile Exchange and later the CFTC, according to the charging document.

In one conversation, Dowson said the cover-up plan amounted to "a fairy (tale) story."

In another conversation, Dowson and Meijer describe their activities to "bully" the market in the last minutes of trading as "a fun game" and discuss expanding the scheme to other commodities like sugar, wheat or corn.

In yet another conversation, Dowson confides to Meijer that he is trying to build up positions but stay under the radar screen, noting "I’m also not doing it so dramatically that … we're talking about it on CNBC (television) or things like this."

The CFTC alleges that in 19 instances over 11 days during March 2007, Optiver's global and U.S. operations attempted to manipulate the settlement price during the trading of next-month contracts for future delivery of crude oil, heating oil and New York Harbor gasoline. The three executives charged allegedly made more than $1 million from the illegal trading.

Congress has been critical of the CFTC for not being more active in investigating potential manipulation of oil prices and for not seeking greater staffing. Legislation is now moving in Congress aimed at stopping "speculation" in oil markets, so the timing of the CFTC action raised questions of whether the action was political.

Obie rejected the suggestion. "I categorically deny it," Obie said. He said that cases are brought when they are ready, not based on politics. "This is not politically motivated."

Obie called the case _ the first brought since the CFTC announced a national oil markets investigation in May _ significant, even though the agency could not quantify how much Optiver’s alleged manipulation had driven oil prices.

"This case is important for the public to know that this manipulation has an impact on the market. But at this point we are not at a point to quantify that," Obie said.

The CFTC complaint involves civil, not criminal, charges. It is up to the Department of Justice to pursue criminal charges, and CFTC officials would not comment on that possibility.

In the charging document, regulators allege that Optiver's top U.S. and global traders engaged in a practice called "banging the close." During the trading day, Optiver allegedly built up substantial trading positions and then tried to offset those positions in the final minutes of trading before the daily settlement, or close of trading, at 2:30 p.m.

The CFTC alleges that Optiver would try to unload up to 30 percent of its positions near settlement and the remainder over the final five minutes of trading, most often the final two minutes of trading on the New York Mercantile Exchange, or Nymex.

http://www.mcclatchydc.com/251/story/45464.html
 
A

Anonymous

Guest
This is called CYA for 7+ years of doing absolutely nothing...They now have numerous investigations going after years of being told to do nothing....Same as the Packers and Stockyards Investigators that told OIG investigators they were told to "shuffle paper"- make it look like you are doing something- but do nothing...

No matter who gets elected- for the good of the common folks Bush can't get out of there soon enough...My fear is McSame with his corrupt Big Corporate and K Street Lobbyist ties means 8 more years of the same.... :(
 

Mike

Well-known member
You're joking, right?

Banging the board at the end of the day is the oldest commodity trick in the book. :roll: :lol:
 

Sandhusker

Well-known member
This is a start, but that's it. These guys weren't doing much, and they certainly weren't moving the oil markets. If there was manipulation going on, these guys are minnows. They need to get the whales.

They only made 1 Million in a commodity that has had a daily range of around $5000. Compare that to Hillary making $100,000 in a commodity with a daily range of $400..... That puts a little perspective on it, doesn't it?
 
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