May 21, 2005
Energy Trader Pleads Guilty to Manipulating Natural Gas Prices
A second energy trader working for The Williams Cos. entered a guilty plea in the Northern District of California to submitting false trade information to a publication in order to manipulate the price of natural gas (7 U.S.C. Sec. 13(a)(2)). Brion McKenna, formerly an energy trader with Williams Energy Marketing & Trading in Tulsa, admitted submitting false information about natural gas trades to two industrynewsletters, Inside FERC's Gas Market Report and NGI's Bidweek Survey -- two sure-fire cures for insomnia for most, but wildly influential publications in the industry. According to a press release issued by the U.S. Attorney's Office (here):
In pleading guilty, Mr. McKenna admitted that between approximately mid-September, 2000, to June 30, 2002, he conspired with others at Williams Energy Marketing & Trading to report fictitious trades to two industry newsletters, Inside FERC's Gas Market Report and NGI's Bidweek Survey. McKenna submitted the fictitious trades for the purpose of manipulating the published index prices in order to increase the value or profitability of Williams' natural gas positions.
"This is the second plea by a Williams trader to the manipulation of natural gas index prices," said U.S. Attorney Kevin V. Ryan. "This plea confirms that Williams traders conspired to manipulate natural gas prices in the West Coast, East Coast, Gulf Coast and Rocky Mountain regions of the country."
Mr. McKenna admitted that most of the trades he reported were deliberately fabricated and that he would routinely circulate a spreadsheet containing fictitious trades for input from other traders. Mr. McKenna also admitted that his predecessor taught him how to complete and submit the spreadsheet with fictitious trades designed to benefit the company's positions.
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