December 7, 2015

CFTC Files and Settles Charges against Total Gas & Power North America, Inc. and Therese Tran for Attempted Manipulation of Natural Gas Monthly Index Settlement Prices

Order Requires TGPNA and Tran Jointly to Pay a $3.6 Million Civil Monetary Penalty and Imposes a Bid-Week Trading Limitation for Two Years

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today issued an Order against Total Gas & Power North America, Inc. (TGPNA) and Therese Tran (formerly known as Therese Nguyen), bringing and settling charges for attempted manipulation of natural gas monthly index settlement prices at four major trading hubs in Texas and elsewhere in the southwest during monthly settlement periods known as “bid-week.” The Order also finds that TGPNA and Tran employed a manipulative device in connection with their purchasing and/or selling large volumes of fixed-price natural gas during bid-week. Tran is a natural gas trader in Houston, Texas, and TGPNA is a natural gas trading and marketing firm headquartered in Houston.

The Order requires Respondents TGPNA and Tran jointly to pay a $3.6 million civil monetary penalty. The Order also imposes, among other sanctions, a two-year trading limitation on the Respondents from trading physical basis or physical fixed-price natural gas at hub locations when TGPNA also holds, prior to and during bid-week, any financial natural gas position whose value is derived in any material part from natural gas bid-week index pricing. The Order further requires TGPNA to comply with various undertakings, including certain reporting and record keeping requirements for two years.

Specifically, the Order finds that during bid-weeks for September 2011, October 2011, March 2012, and April 2012, TGPNA, through Tran and other traders under Tran’s direction, attempted to manipulate monthly index settlement prices of natural gas at four hubs, including El Paso Permian Basin, El Paso San Juan Basin, Southern California Gas Co., and West Texas Waha through their physical fixed-price trading during bid-week. The Order finds that the Respondents were one of the largest players in the fixed-price market during these periods, with their trading accounting for a substantial percentage of the total market by volume at the relevant hubs, even though TGPNA had no material customer business, assets, or transportation at the hubs. According to the Order, through this fixed-price trading, Respondents attempted to favorably affect the monthly index settlement prices to benefit TGPNA’s related financial positions, including basis swap and index swap positions.

CFTC Division of Enforcement staff members responsible for this case are Danielle Karst, Eugene Smith, Peter M. Haas, Patrick Marquardt, Saadeh A. Al-Jurf, and Paul G. Hayeck.

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Last Updated: December 7, 2015