CFTC moves to force Platts to divulge trade data documents

The CFTC’s subpoenas were issued as part of a broad investigation of energy trading practices, including reports of false reporting of trade data to Platts and the possible manipulation of its indexes in the natural gas area. To date, the CFTC has issued orders finding that traders for Dynegy Marketing and Trade, West Coast Power and El Paso Merchant Energy made false reports to Platts. These companies were fined a total of $25 million in connection with these orders.

McGraw-Hill has been ordered to appear before the US District Court for the Southern District of Texas on June 2, to show cause, if there is any, why it should not be ordered by the Court to produce documents as required by the subpoenas.

“We have had numerous discussions with the CFTC on how we can provide additional information in a manner that would not violate our First Amendment rights as publishers,” said a Platts spokesman. “We are confident that an understanding can be reached. Additionally, we share the CFTC's goal of enhancing transparency and openness in the energy market, and over the past year we have instituted broad improvements to strengthen our price reporting.”

But the CFTC indicated that McGraw-Hill appears to be resisting the subpoenas “This action is part of our vigorous pursuit of all forms of misconduct that violate the Commodity Exchange Act. We expect and demand full compliance with our subpoenas. McGraw-Hill claims it is co-operating with government regulators. Unfortunately, its definition of co-operation falls far short of the meaning of co-operation,” said Gregory Mocek, director of the CFTC’s division of enforcement in a statement.