BP Faces US Fine For 'Market Manipulation' Aug 5th 2013, 14:27
BP has been told it faces a fine of almost £19m for alleged manipulation of the natural gas market.
The US federal energy regulator confirmed it had ordered the company to respond to the allegations within 30 days.
The case, brought by the Federal Energy Regulatory Commission’s (FERC) Office of Enforcement, claims BP manipulated the natural gas market at the Houston Ship Channel from mid-September 2008 through November of that year.
FERC, which first raised the allegations in 2011, said the order marked the next stage in proceedings and indicated that it believed there was a case to answer.
The regulator said its Office of Enforcement alleged BP’s Texas-based Southeast Gas Trading desk bought and sold physical gas at the Houston Ship Channel in a way designed to increase the value of BP’s financial paper position.
The total proposed fines include a penalty of £18.2m and £520,000 in profits, plus interest, from the alleged trading scheme.
The move comes at a time when BP is fighting to improve its image in the US following the Gulf of Mexico oil disaster.
It has consistently denied any wrong-doing relating to the gas market case.
FERC has been pursuing banks and other energy companies for entering loss-making trades in one market in a bid to make gains in another.
In July it settled a power market manipulation claim against JPMorgan Chase for $ 410m (£267m) and is seeking $ 470m (£306m) from Barclays over allegations of similar activities.
Barclays has said it will fight the proposed fine.
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