CFTC to sue AEP over false gas trades

AEP said that after learning in September 2002 of false reporting of gas price information it undertook its own internal investigation of gas price reporting practices. AEP determined that five then-current employees had submitted inaccurate gas trading information to trade publications. The company terminated the five employees' contracts, self-reported the incident to the Federal Energy Regulatory Commission and the CFTC, publicly announced the employee terminations and put into place procedures to prevent a recurrence of the inaccurate submission of gas trading information.

“We have been co-operating with the CFTC in an attempt to seek resolution to this matter,” said Jeffrey Cross, AEP’s general counsel. “While the possibility of civil action always existed, we are surprised the CFTC chose to file at this time. We still believe that a settlement is possible and we are open to that possibility.”

US regulators have settled with a number of energy companies following charges of attempted market manipulation. Earlier this month, for example, Duke Energy Trading and Marketing agreed to pay $28 million to settle CFTC charges that it manipulated the natural gas market between 2000 and 2002.