December 21, 2012 / 11:41 PM / in 5 years

Judge allows oil price manipulation suit against Arcadia, Parnon

* U.S. judge denies bid to dismiss class action

* Case is the second facing traders over 2008 prices

By Terry Baynes

Dec 21 (Reuters) - A U.S. judge on Friday refused to dismiss a lawsuit accusing Arcadia Petroleum, Parnon Energy and two oil traders of manipulating the price of oil in 2008.

In his order, U.S. District Judge William Pauley of the Southern District of New York found plausible the lawsuit’s claims that the defendants tried to fix the physical crude oil market to benefit their financial trading positions.

The class action, consolidating several lawsuits by other oil traders, is the second faced by traders James Dyer of Parnon Energy and Nick Wildgoose of Arcadia and the companies.

In April, Pauley denied a motion to dismiss similar allegations by the U.S. Commodity Futures Trading Commission regulator in one of the largest-ever oil manipulation cases.

The lawsuits claim that Dyer and Wildgoose, both of whom previously worked at BP Plc, amassed large physical positions at the key U.S. oil trading hub of Cushing, Oklahoma, to create an impression of tight supplies that would boost prices.

Later they dumped those barrels back onto the market, causing prices to crash and racking up profits from short positions they had accrued in futures markets, the suit said.

In denying the defendants’ motion to dismiss the suit, the judge found the allegations “neither bare nor conclusory.”

“Plaintiffs’ alleged injury - losses from transacting in a market tainted by price manipulation - is of the type antitrust laws were intended to prevent,” he wrote.

Timothy Carey, a lawyer for the defendants, did not immediately respond to a request for comment. He argued at a court hearing in October that plaintiffs failed to make their claim that the traders intended to monopolize the crude oil futures market at Cushing.

Arcadia and Parnon are owned by Norwegian billionaire John Fredriksen. Fredriksen has said the U.S. lawsuit against his oil trading companies may be a bid to extract revenge for BP’s giant Gulf of Mexico oil spill in 2010, by targeting the former BP traders.

Arcadia has argued the traders never held enough oil to influence global prices.

The case is In re: Crude oil commodities futures litigation in U.S. District Court for the Southern District of New York, No. 11- 03679.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below