Fraud, energy derivatives trading

Fraud has become a big issue in energy derivatives trading.

A former Bank of Montreal (BMO) natural gas trader pled guilty in November 2008 to intentionally mismarking trades, resulting in  over $800 million of fraud-related trading losses.

The interesting part in the item on  EmpireStateNews.Net was that that the natural gas trader pleaded guilty to violating state banking law, not theft. So where did he money go?

A 37-year-old, pled guilty to falsifying BMO’s trading records. In pleading guilty, the defendant admitted that from May 2003 until April 2007, he intentionally falsified BMO’s records relating to the valuation of natural gas derivative contracts. The plea is part of a joint investigation with the United States Attorney’s Office for the Southern District of New York and the New York Office of the Federal Bureau of Investigation into natural gas trading losses at the Manhattan branch of BMO. As part of the joint investigation, the defendant also pled guilty in United States District Court for the Southern District of New York to conspiracy, wire fraud, making false bank entries, and obstructing a federal regulatory investigation. The United States Attorney’s Office also announced the indictment and arrest of a former broker and CEO of Optionable Inc., an energy derivatives brokerage firm in Westchester County, New York.

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2 thoughts on “Fraud, energy derivatives trading

  1. RBC Bank President Gordon Nixon – Salary $11.73 Million

    $100,000 – MISTAKE (FISHERMEN’S LOAN)

    I’m a commercial fisherman fighting the Royal Bank of Canada (RBC Bank) over a $100,000 loan mistake. I lost my home, fishing vessel and equipment. Help me fight this corporate bully by closing your RBC Bank account.

    There was no monthly interest payment date or amount of interest payable per month on my loan agreement. Date of first installment payment (Principal + interest) is approximately 1 year from the signing of my contract.
    Demand loan agreements signed by other fishermen around the same time disclosed monthly interest payment dates and interest amounts payable per month.The lending policy for fishermen did change at RBC from one payment (principal + interest) per year for fishing loans to principal paid yearly with interest paid monthly. This lending practice was in place when I approached RBC.
    Only problem is the loans officer was a replacement who wasn’t familiar with these type of loans. She never informed me verbally or in writing about this new criteria.

    Phone or e-mail:
    RBC President, Gordon Nixon, Toronto (416)974-6415
    RBC Vice President, Sales, Anne Lockie, Toronto (416)974-6821
    RBC President, Atlantic Provinces, Greg Grice (902)421-8112 mail to:greg.grice@rbc.com
    RBC Manager, Cape Breton/Eastern Nova Scotia, Jerry Rankin (902)567-8600
    RBC Vice President, Atlantic Provinces, Brian Conway (902)491-4302 mail to:brian.conway@rbc.com
    RBC Vice President, Halifax Region, Tammy Holland (902)421-8112 mail to:tammy.holland@rbc.com
    RBC Senior Manager, Media & Public Relations, Beja Rodeck (416)974-5506 mail to:beja.rodeck@rbc.com
    RBC Ombudsman, Wendy Knight, Toronto, Ontario 1-800-769-2542 mail to:ombudsman@rbc.com
    Ombudsman for Banking Services & Investments, JoAnne Olafson, Toronto, 1-888-451-4519 mail to:ombudsman@obsi.ca

    http://www.pfraser.blogspot.com

    http://www.corporatebully.ca

    http://www.youtube.com/CORPORATEBULLY

    http://www.p2pnet.net/story/17877

    “Fighting the Royal Bank of Canada (RBC Bank) one customer at a time”

  2. Paul,
    Assuming your claim is bona-fide (and it sounds like it is…) I had no problem posting your comment. For the record – a bank’s compliance with regulation is a requirement – not a function of the level of competence and experience of their employees.

    Good luck
    Danny Lieberman
    Buggy software, risky software

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