Federal regulators have charged a pair of big-time traders and their firms with illegally manipulating oil prices during the 2008 oil crisis. According to the Commodity Futures Trading Commission, the firms made $50 million in “unlawful profits” by hoarding nearly two-thirds of the oil available in one major US trading hub, creating the impression of scarcity and driving up prices. Then they allegedly took big short positions and dumped their barrels back onto the market all at once, crashing prices, the New York Times reports.
The suit names James Dyer of Parnon Energy and Nick Wildgoose of Arcadia Energy. Both firms are owned by billionaire Norwegian oil tanker magnate John Fredriksen. “This is a very big deal, in that we seldom allege that the defendants manipulated the crude markets to the tune of $50 million,” one CFTC commissioner tells Reuters. “That’s an awful lot of money, and when we look at how consumers are suffering at the gas pump, we need to prosecute activity like this.” (Read more commodities stories.)