Reuters: Regulatory News: UPDATE 1-Judge won't dismiss CFTC oil manipulation case

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UPDATE 1-Judge won't dismiss CFTC oil manipulation case Apr 26th 2012, 19:04 Thu Apr 26, 2012 3:04pm EDT April 26 (Reuters) - A U.S. judge denied a motion to dismiss the U.S. Commodity Futures Trading Commission's lawsuit against Arcadia Petroleum and Parnon Energy on Thursday, saying the regulator had "plausibly alleged" the traders manipulated oil prices in 2008. The move confirms one the largest ever oil manipulation cases will go ahead, after it was first brought by the CFTC last May. Swiss-based Arcadia and Oklahoma-based Parnon are accused of trying to fix the physical crude oil market to benefit their financial trading positions. In a 29-page ruling, U.S. District Judge William H. Pauley of the Southern District of New York said "The Commission (CFTC) plausibly alleges that Defendants attempted to manipulate the price," of the May and June 2008 U.S. crude oil contracts in April of that year. The CFTC case alleges that traders James Dyer of Parnon Energy and Nick Wildgoose of Arcadia, both of whom previously worked at BP Plc, amassed large physical positions at a key U.S. oil trading hub to create the impression of tight supplies that would boost prices. Later they dumped those barrels back onto the market, causing prices to crash and racking up profits from short positions they had accrued in futures markets, the suit said. Arcadia and Parnon are owned by Norwegian billionaire John Fredriksen. Fredriksen has said the U.S. lawsuit against his oil trading companies may be a bid to extract revenge for BP's giant Gulf of Mexico oil spill in 2010, by targeting the former BP traders.

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