Regulator to Bring Action Against BP On Trading in '02
By CHIP CUMMINS and ANN DAVIS
December 14, 2006; Page A12
The U.S. Commodity Futures Trading Commission recently advised BP PLC that it intends to bring a civil enforcement action against the company over its trading in unleaded-gasoline futures in October 2002, BP said in a regulatory filing.
The development is the latest in a series of regulatory problems for London-based BP, one of the world's largest oil companies.
The CFTC also is investigating "various aspects of BP's crude-oil trading and storage activities in the U.S. since 2003 and has made various formal and informal requests for information" the company said in the filing yesterday. The agency informed the British energy giant of the potential action related to its gasoline trades on Nov. 21, it said. A CFTC spokesman declined to comment.
In addition, the U.S. attorney's office for the Northern District of Illinois in Chicago is probing BP's gasoline trading, BP said. The Wall Street Journal in August disclosed the CFTC's civil probe into BP's crude-oil activities and the civil and criminal investigations into its gasoline trading.
A BP spokesman said the company had reviewed the facts surrounding the gasoline trade at issue in the potential CFTC action. "We are confident that manipulation wasn't attempted, did not occur, and laws were not broken. Free market forces of supply and demand were at work that day and we believe our trading activity on that day was lawful and we can prove that in court if needed," he said.
BP said it was cooperating with investigators, including providing documents and witness testimony. The action is being recommended by CFTC enforcement staff and the final decision to bring an action rests with the agency's commissioners.
The company also said earlier this year that it would commission an independent probe into its trading-compliance practices. In the filing yesterday, BP said it will be making the findings of that probe, which is being conducted by the accounting firm KPMG LLP, available to regulators.
In addition to the Justice Department's criminal probe of the gasoline trading, BP faces criminal probes in Alaska related to its management of a big oil field plagued with corrosion problems, and a criminal probe related to the March 2005 explosion at a BP refinery in Texas City, Texas, that killed 15.
BP already faces a civil complaint alleging it manipulated the U.S. propane market in early 2004, and the Justice Department has filed a related criminal complaint against a former BP trader who entered a guilty plea in the case. BP denies those allegations, and has said it is cooperating in all probes.
BP's regulatory woes have ratcheted up over the last two years. In addition to a handful of probes by regulators and U.S. attorneys, the company's refinery safety record is being investigated by an outside panel of experts. Led by former Secretary of State James A. Baker III, the high-profile panel is expected to issue its report and recommendations next month, the latest public report stemming from the refinery explosion in Texas.
By CHIP CUMMINS and ANN DAVIS
December 14, 2006; Page A12
The U.S. Commodity Futures Trading Commission recently advised BP PLC that it intends to bring a civil enforcement action against the company over its trading in unleaded-gasoline futures in October 2002, BP said in a regulatory filing.
The development is the latest in a series of regulatory problems for London-based BP, one of the world's largest oil companies.
The CFTC also is investigating "various aspects of BP's crude-oil trading and storage activities in the U.S. since 2003 and has made various formal and informal requests for information" the company said in the filing yesterday. The agency informed the British energy giant of the potential action related to its gasoline trades on Nov. 21, it said. A CFTC spokesman declined to comment.
In addition, the U.S. attorney's office for the Northern District of Illinois in Chicago is probing BP's gasoline trading, BP said. The Wall Street Journal in August disclosed the CFTC's civil probe into BP's crude-oil activities and the civil and criminal investigations into its gasoline trading.
A BP spokesman said the company had reviewed the facts surrounding the gasoline trade at issue in the potential CFTC action. "We are confident that manipulation wasn't attempted, did not occur, and laws were not broken. Free market forces of supply and demand were at work that day and we believe our trading activity on that day was lawful and we can prove that in court if needed," he said.
BP said it was cooperating with investigators, including providing documents and witness testimony. The action is being recommended by CFTC enforcement staff and the final decision to bring an action rests with the agency's commissioners.
The company also said earlier this year that it would commission an independent probe into its trading-compliance practices. In the filing yesterday, BP said it will be making the findings of that probe, which is being conducted by the accounting firm KPMG LLP, available to regulators.
In addition to the Justice Department's criminal probe of the gasoline trading, BP faces criminal probes in Alaska related to its management of a big oil field plagued with corrosion problems, and a criminal probe related to the March 2005 explosion at a BP refinery in Texas City, Texas, that killed 15.
BP already faces a civil complaint alleging it manipulated the U.S. propane market in early 2004, and the Justice Department has filed a related criminal complaint against a former BP trader who entered a guilty plea in the case. BP denies those allegations, and has said it is cooperating in all probes.
BP's regulatory woes have ratcheted up over the last two years. In addition to a handful of probes by regulators and U.S. attorneys, the company's refinery safety record is being investigated by an outside panel of experts. Led by former Secretary of State James A. Baker III, the high-profile panel is expected to issue its report and recommendations next month, the latest public report stemming from the refinery explosion in Texas.
