BP faces charges of price-fixing in US
US regulators accused BP traders yesterday of illegally cornering part of the propane market in an attempt to manipulate energy prices.
In a lawsuit filed in Chicago, US energy regulators claim BP employees had a "dominant and controlling position" in propane that allowed it to drive prices up above 90 cents per gallon in February 2004.
BP is the largest supplier of propane in North America, where the gas is used to heat about 7 million homes, mostly in rural areas.
The lawsuit claims that "with the knowledge, advice, and consent of senior management, BP employees developed and executed a speculative trading strategy in which BP cornered the February 2004 ... physical propane market".
The employees at the BP subsidiary, BP Products North America Inc, sought a profit of at least $20m through their actions, the regulators added.
Separately, the Department of Justice announced that a former BP trader, Dennis Abbott, had pleaded guilty "to conspiring to manipulate and corner the propane market", and had agreed to cooperate in "an ongoing investigation". The regulator's lawsuit describes Abbott, who faces five years in prison and a $250,000 fine, recorded telling another trader, "Dude, you're the entire [expletive deleted] propane market".
BP denied that any market manipulation occurred and said it would contest the charges in court. A spokesman said the company had dismissed several employees for failing to comply with its guidelines, and had cooperated fully with US investigators. "We have also taken steps to strengthen the supervision of our trading activities," the spokesman added.
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