Fund accused of manipulating oil price (2 in two days!)

The controversy over whether speculators are behind skyrocketing prices of oil deepened on Thursday as US regulators filed charges against a trading fund for manipulating energy futures prices. The Commodity Futures Trading Commission alleged that Netherlands-based Optiver Holding, two of its subsidiaries and three high-ranking employees manipulated prices of crude oil, heating oil and gasoline futures contracts on the New York Mercantile Exchange at least five times in March 2007. Laying out its case in a series of e-mails and telephone conversation recordings, the CFTC claimed two of the defendants discussed the “fairy story” they would give to regulators in... snip

The CFTC claims Optiver made 19 separate attempts over 11 days to manipulate prices, and caused artificial prices five times. According to the agency, the defendants forced futures prices lower in three cases and higher twice, though only by small amounts in each instance. Ultimately, the scheme allegedly allowed the defendants to profit regardless of the direction of the market and resulted in more than $1m in profits.

The defendants, according to the complaint, used a scheme known as “banging” or “marking”’ the close. It refers to the practice of acquiring big positions right before the close to manipulate prices.