Release: 4920-04
For Release: April 28, 2004

ENRON SEEKS BANKRUPTCY COURT APPROVAL TO ENTER INTO PROPOSED SETTLEMENT WITH THE CFTC

Proposed Settlement Would Resolve CFTC Complaint Charging Enron With Manipulation of Natural Gas Prices in July 2001, and Other Violations

WASHINGTON, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) announced today that Enron Corp. (Enron) has submitted an application to the U.S. Bankruptcy Court for the Southern District of New York seeking that court’s permission to enter into a settlement with the CFTC. As a Chapter 11 Debtor-In-Possession, Enron must obtain the approval of the Bankruptcy Court before it can enter into settlement agreements. Enron’s filing is intended as the first step in resolving the CFTC’s action against Enron, which the CFTC filed on March 12, 2003 in the U.S. District Court for the Southern District of Texas, Houston Division. If the Bankruptcy Court grants Enron’s request to enter into the proposed settlement, the parties will then submit the proposed order to the U.S. District Court for the Southern District of Texas in Houston for its approval and entry. The proposed consent order provides for a permanent injunction and other equitable relief against Enron and a $35 million civil monetary penalty

In its complaint, the CFTC alleges that on July 19, 2001, Enron and one of its former natural gas traders used Enron Online (EOL), its web-based electronic trading platform, to buy an extraordinarily large amount of Henry Hub (HH) natural gas next-day spot contracts in a short period of time, thereby causing artificial prices in the HH Spot Market and impacting the correlated NYMEX natural gas futures contract. The complaint also alleges that Enron operated EOL as an illegal futures exchange from September through December 2001 and offered an illegal agricultural futures contract on EOL. (See CFTC News Release 4762-03, March 12, 2003.)

The proposed consent order would resolve all the charges in the complaint against Enron.

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