Manager of Operations for Energy Company Admits to Conspiracy to Manipulate Natural Gas Prices; Third Employee Pleads Guilty

11 June 2006

A third Williams Energy employee, Daryl Russell Brown, 36, pled guilty today to a conspiracy to manipulate natural gas prices which lasted approximately four years, U.S. Attorney Kevin V. Ryan of the Northern District of California announced. Brown is a former trader and manager of operations at Williams Energy Marketing & Trading, a subsidiary of The Williams Companies based in Tulsa, Okla. Brown entered the guilty plea before U.S. District Judge Susan Illston in San Francisco.

In pleading guilty, Brown admitted that from approximately June 1998 through 2002, he conspired with others at Williams Energy Marketing & Trading to report fictitious trades to two industry newsletters, Inside FERC's Gas Market Report and NGI's Bidweek Survey. Brown and his co-conspirators submitted fictitious trades for the purpose of manipulating the published index prices in order to increase the value or profitability of Williams' natural gas positions.

"Mr. Brown admitted that approximately 75 percent of the trades he reported to industry newsletters were deliberately fabricated," said U.S. Attorney Ryan. "This false data skewed published prices so the company could illegally profit. This continuing investigation should send a message to traders and companies that they can be held criminally accountable for illegally manipulating data."

Brown admitted that he would meet with traders and decide as a group what false numbers should be reported to the indices. He also acknowledged that in early 2000, he received a call by an Inside FERC representative to confirm trading data. Brown admitted that he misled the representative by concealing that the reported trades were fictitious and falsely claiming that he could locate records confirming that the nonexistent trades occurred.

Brown was charged in an information on March 31, 2006, with one count of manipulation of the price of a commodity in interstate commerce in violation of the Commodity Exchange Act.

Under the plea agreement, Brown agreed to cooperate with the United States's ongoing investigations into manipulation of natural gas index prices. Brown's sentencing is set for Sept. 22, 2006.The maximum statutory penalty for each count of manipulation of the price of a commodity is five years in prison and a fine of $250,000.

This guilty plea is the result of a two year investigation by the FBI and the Commodity Futures Trading Commission. This case was brought jointly by the Northern District of California and the Fraud Section of the Criminal Division of the Department of Justice. Prosecutors include Robertson Park, Assistant Chief of the Fraud Section; Amanda Riedel, Trial Attorney with the Fraud Section; and Keslie Stewart, Assistant United States Attorney for the Northern District of California.

http://www.usnewswire.com/

Source: usnewswire

All trademarks and copyrighted information contained herein are the property of their respective owners.