US Commodity Futures Trading Commission has obtained a USD10m civil monetary penalty in a consent order settling charges against Energy Transfer Partners of Dallas and three of its subsidi

US Commodity Futures Trading Commission has obtained a USD10m civil monetary penalty in a consent order settling charges against Energy Transfer Partners of Dallas and three of its subsidiaries, Energy Transfer Company of San Antonio and Houston, Houston Pipeline Company of Houston and ETC Marketing of San Antonio and Houston.

The defendants were charged with attempting to manipulate natural gas prices at the Houston Ship Channel delivery hub. The consent order, which was agreed to by the parties prior to a trial, imposes a permanent injunction against all defendants and requires them to pay the civil monetary penalty jointly and severally.

The order arises from a CFTC complaint filed on July 26, 2007 that alleged that between September and early December 2005, the defendants attempted to manipulate the price of natural gas for delivery at the HSC by selling on the Intercontinental Exchange massive quantities of natural gas at HSC, to place downward pressure on natural gas prices at HSC.

In addition, by reporting those transactions to Inside FERC Gas Market Reports, the CFTC alleged, they attempted to manipulate the index price of natural gas at HSC calculated and disseminated by Inside FERC in October and December 2005.

The complaint claimed that the defendants engaged in this scheme in an attempt to benefit their financial basis swap positions tied to the Inside FERC October and December 2005 HSC natural gas index prices. The vast majority of the physical HSC natural gas transactions and financial basis swaps at issue in the complaint were executed on the ICE.