Mirant settles price-reporting charges
Atlanta-based energy company Mirant has settled charges with the US Commodity Futures Trading Commission (CFTC) of false reporting of natural gas prices.
MAEM elected to settle with the CFTC to avoid the expense, distraction and risk of litigation and enable the company’s resources to remain fully focused on Chapter 11 emergence, said Doug Miller, Mirant’s general counsel.
Under the terms of the settlement, MAEM neither admitted nor denied the allegations that its employees reported false information in an attempt to manipulate pricing.
The false reports submitted by MAEM included false price, volume and/or counterparty information concerning natural gas cash transactions, as well as information concerning fictitious trades and/or trades observed in the market, alleged the CFTC. The information could have affected prices of New York Mercantile Exchange natural gas futures contracts, added the commission.
Price and volume information is used by price compilers to calculate published indexes of natural gas prices for various natural gas hubs throughout the US. The price compilers in this case were Gas Daily, Inside Ferc and Natural Gas Intelligence.
In 2002, Mirant had reviewed and amended its external reporting process following industry-wide natural gas reporting problems, said Miller. MAEM now requires all data provided to indexes to be validated and conveyed by risk management staff reporting to the company’s chief risk officer, rather than by MAEM personnel, he added.
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