Feds May Sue BP Over Gas Trading

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Feds May Sue BP Over Gas Trading

Federal regulators are considering civil charges against BP, alleging that the company had connections to trading activities in the gasoline futures market in late Oct. 2002, reported The New York Times.

The company was notified in November by investigators at the Commodities Futures Trading Commission that they would recommend a civil enforcement action against BP for trading activities in unleaded gasoline on Oct. 31, 2002.

BP provided documents and testimony related to the investigation, the Times reported, citing a filing that the company made with the Securities and Exchange Commission (SEC). BP also denied any accusations and announced that it was prepared to make a case before a judge, spokesman Scott Dean told the newspaper.

"We've reviewed the facts on that single trading day four years ago, and we are confident that manipulation was not attempted, did not occur, and that no laws were broken by our people," Dean told the Times. "We believe our trading activity was lawful and we can prove it in court if needed."

The SEC is looking into "various aspects" of its trading and storage activities of crude oil since 2003 and has made "various formal and informal requests for information," the company stated.

An SEC spokesman, Dennis Holden, could not confirm or deny the recommendation for civil action. He told the Times that the regulatory filings "speak for themselves."

In addition, the company hired KPMG, an independent auditing firm, to review its "trading compliance and culture," in the U.S., the report stated. That review will be available to regulators when it is complete.

BP has been in the spotlight for its trading practices before. Its trading desk often attracts attention, as regulators view its trading practices as "aggressive," the report stated.

The Commodities Futures Trading Commission filed a complaint in June to the Federal District Court in Illinois, charging that traders at BP tried to manipulate propane prices by cornering the market in 2004, the Times reported.

In response, BP denied any charges of market manipulation, stated that it would contest the charges in court and fired several employees, claiming that they failed to comply with training guidelines, the report stated.