NATURAL GAS PRICE SCAM

This story, covered by NewEnergyNews last week, is worth looking at again: big profits on scam trading and natural gas customers left holding the bag for billions.

Amaranth case puts spotlight on loopholes; Traders used unregulated exchange
Tara Perkins, June 26 (Toronto Globe and Mail)

WHO
- Centaurus & Amaranth Advisors LLC
- Brian Hunter, Amaranth top energy trader
- Michael Carrieri, Amaranth compliance officer
- Shane Lee, former trader, Amaranth
overall supply seems pretty consistent (click to enlarge)

WHAT
A Senate subcommittee report found that trading in natural gas futures was, in the spring and summer of 2006, routinely manipulated, driving prices up and costing businesses and individual gas consumers an estimated $6 billion.

WHEN
August 29, 2006

WHERE
New York Mercantile Exchange (NYMEX), Intercontinental Exchange (ICE), Commodity Futures Trading Commission (CFTC)

WHY
- Unlike NYMEX, ICE trading is exempt from regulation. Unlike NYMEX, ICE has no legal obligation to monitor trading/traders or report to the CFTC.
- With one exchange regulated and one not, something called “swaps” could be worked, driving prices up.
- The fix will be to close the “ENRON loophole” by forcing both exchanges to regulate.
pretty obvious something is going on here (click to enlarge)

QUOTES
After trading closed, Hunter instant messaged another trader: "Classic pump and dump…Boy I bet you see some CFTC inquiries for the last two days."
The trader ("crummertd"): "Until they monitor swaps - no big deal - it's all swaps now."