Natural gas traders plead guilty
to price manipulation charge

By Julia Cheever, Bay City News Service

June 20, 2006

SAN FRANCISCO (BCN) - Three natural gas traders pleaded guilty in federal court in San Francisco yesterday to conspiring to manipulate prices by reporting fictitious trades during the state's energy crisis in 2000.

The traders are Paul Atha, 39, of Houston, and Christopher McDonald, 38, of Atlanta, both of whom worked for Atlanta-based Mirant Corp. at the time, and Michael Whalen, 36, of Houston, who worked for Cincinnati-based Cinergy Corp.

The three men admitted in written plea agreements that they conspired to report fictitious trades to an industry newsletter, "Inside FERC," from July through October 2000.

They said the purpose was to attempt to skew the published index prices of natural gas in directions that would benefit their companies' positions in the market.

They entered their guilty pleas before U.S. District Judge Marilyn Patel and will be sentenced on Oct. 23.

The maximum possible penalty for the conspiracy to manipulate the price of a commodity is five years in prison, but the actual sentence will be determined after consideration of federal sentencing guidelines.

U.S. Attorney Kevin Ryan said, "The false data these traders provided to an industry newsletter skewed published prices so the company could illegally profit.

"This continuing investigation should send a message to traders and companies that they can be held criminally accountable for illegally manipulating data," Ryan said.

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