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US: BP blames newcomer’s slip-of-the-tongue for 2008 price-fixing claims

By  |  August 5, 2013

Gas conglomerate BP said an error on the part of a trainee looking to impress highers-up is to blame for allegations the company fixed gas prices in 2008. The claims followed the Federal Energy Regulatory Commission’s ruling that the company must pay $28 million in fines from the alleged price manipulation, which accuses three BP traders of fixing gas prices by buying physical fuel themselves. BP has blamed the allegations on what it called “incorrect and inappropriate” comments in a recorded phone call, in which a trainee, one of the three accused of manipulating prices, bragged about the alleged scheme to a colleague.

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    That conversation reportedly plays a major role in the FERC’s case against BP. According to the regulator, the manipulation intended to allow BP to make profits in the wake of Hurricane Ike, which caused gas prices of the Houston Ship Canal to dramatically decrease. Further, the FERC claims that the chaos in the hurricane’s aftermath allowed the three to believe they would make such “repeated uneconomic sales” without being detected.

    According to reports, the trainee, Clayton Luskie, apparently boasted about the scheme to a colleague, who then suggested the deal may be perceived as “market manipulation” and advised Luskie to speak with his manager. The FERC claims his manager Graydn Comfort reportedly cut Luskie off as he knew the phone call was being recorded. The allegations were followed by an investigation by the FERC, which claims its findings are consistent with such a scheme. BP launched its own investigation into the matter but found no wrongdoing and insists Luskie mis-described the events.

    Full Content: Telegraph

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