Release: 4960-04
For Release: July 19, 2004

NATURAL GAS TRADER HUNTER SHIVELY AGREES TO COOPERATE WITH U.S. COMMODITY FUTURES TRADING COMMISSION IN SETTLING MANIPULATION CASE

WASHINGTON, D.C. - The U.S. Commodity Futures Trading Commission (CFTC) announced today that United States District Judge Melinda Harmon of the United States District Court for the Southern District of Texas entered a consent order of permanent injunction prohibiting violations of the Commodity Exchange Act and granting other relief against former Enron natural gas trader Hunter Shively of Houston, Texas as part of a settlement which included seeking entry of the Consent Order and payment of $300,000 civil penalty. The consent order and the Settlement Agreement resolve the charges brought by the CFTC against Shively. (See CFTC News Release No. 4762-03, March 12, 2003).

In its complaint, the CFTC alleged that on July 19, 2001, Shively and Enron Corp. engaged in a manipulative scheme by using Enron's former web-based electronic trading platform to buy an extraordinarily large amount of natural gas in a short period of time. The complaint further alleges that immediately following the pre-arranged buying spree, Shively took various actions, including agreeing to cover trading losses of, and directing a payment from an account he controlled to, other traders involved in the scheme. As the complaint alleges, the manipulation of the Henry Hub Spot Market had a direct and adverse effect on the New York Mercantile Exchange August 2001 natural gas futures contract, including causing prices in NYMEX Henry Hub Futures to become artificial.

In announcing this settlement, Gregory Mocek, Director of Enforcement, CFTC, stated,

Our resolve to prosecute those who manipulate or attempt to manipulate the natural gas and energy market remains steadfast. As witnessed by the large number of cases that we have prosecuted in this area, Mr. Shively was not a lone violator in this marketplace. He was just one of the crowd of highly paid traders at a number of other companies who incorrectly perceived the natural gas market as an open forum for mischief. He ultimately is doing the right thing by settling this matter and cooperating with the government.

The consent order and settlement agreement together permanently enjoin Shively from violating the Commodity Exchange Act, compel him to cooperate in any further CFTC investigations relating to this matter, require him to pay a $300,000 civil monetary penalty to the government, and prohibit Shively from applying for or acting in a registered capacity with the CFTC for eighteen months.

The following CFTC Division of Enforcement staff members are responsible for this case: W. Derek Shakabpa, Michael R. Berlowitz, John J. Cipriani, David Acevedo, Stephen J. Obie, Lenel Hickson, Jr., Richard B. Wagner, and Vincent McGonagle.

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Media Contacts
Alan Sobba
(202) 418-5080
Dennis Holden
(202) 418-5088
Office of External Affairs

Staff Contact
Vincent McGonagle
Senior Deputy Director
CFTC Division of Enforcement
(202) 418-5387

Related Document
Order - Consent Order
Complaint - Enron