| NEW YORK
NEW YORK Aug 4 Three oil trading firms and two
traders agreed to pay $13 million to settle a U.S. regulator's
lawsuit accusing them of manipulating oil markets in 2008 as
prices were soaring, leading to more than $50 million of illegal
In the settlement with the U.S. Commodity Futures Trading
Commission, Arcadia Petroleum Ltd, Arcadia Energy SA, Parnon
Energy Inc, Arcadia trader Nicholas Wildgoose and Parnon trader
James Dyer also agreed to a permanent injunction requiring three
years of improved record-keeping and oversight, and the hiring
of an independent consultant.
The defendants also agreed for three years to limit their
trading in some crude oil contracts. None of the parties
admitted or denied wrongdoing in agreeing to settle.
Settlement terms were disclosed in a filing on Monday with
the U.S. District Court in Manhattan. A settlement in principle
had been reached in June after nearly three months of mediation.
Arcadia and Parnon are both owned by John Fredriksen, a
The lawsuit was filed in May 2011, in the midst of an
effort by the Obama administration to assure Americans that
rising gas prices were not the result of artificial
According to the CFTC, in early 2008 as oil prices were
approaching a then-record $100 a barrel, Dyer, of Brisbane,
Australia, and Wildgoose, of Rancho Santa Fe, California, built
up huge crude oil positions, creating an impression of tight
supply, only to soon dump their holdings and collect profits.
The CFTC said Dyer and Wildgoose in January 2008 took big
positions in oil futures, and bought millions of barrels of
physical crude oil at Cushing, Oklahoma, a major delivery point,
despite having no need for the oil.
At one point that month, the traders owned 4.6 million
barrels of oil, about two-thirds of the 7 million expected to be
available at Cushing at the end of the month, the CFTC said.
Dyer and Wildgoose repeated the scheme in March 2008, it said.
Both traders had previously worked at BP Plc.
Fredriksen, the owner of Arcadia and Parnon, has said the
lawsuit might have been a bid by U.S. regulators to extract
revenge for BP's role in the 2010 Gulf of Mexico Oil spill.
Timothy Carey, a partner at the law firm Winston & Strawn
who on behalf of the defendants signed the consent order
imposing the penalty and injunction, did not immediately respond
to a request for comment.
Arcadia Petroleum has offices in London; Arcadia Energy in
Nyon, Switzerland; and Parnon in Rancho Santa Fe.
(Reporting by Jonathan Stempel in New York; Editing by Leslie