Government Sues Oil Traders For Manipulation

I've often wondered how much manipulation exists in the oil markets. The speculators definitely are to blame for a lot of price instability.

Now the Commodity Futures Trading Commission (CFTC) is suing some major players in oil for manipulation during 2008 that saw a run up of oil prices followed by a big crash.

The defendants are well known traders and firms who hold large volumes of oil interest. Two companies in the suit are owned by Norwegian billionaire John Frederiksen. Also named are James Dyer of Parnon Energy in Oklahoma, and Nick Wildgoose of Arcadia Energy based in Europe.

They are being sued for amassing large positions at a U.S. trading hub to make supplies seem tight and boost prices. The barrels of oil were then dumped back on to the market after prices were at a premium, causing a major crash. These entities of course raked in the artificially inflated profits on those inflated prices of oil, while the rest of us paid at the pump.

They are estimated to have profited around $50 million on these manipulative practices. The government is suing them for three times that amount.

My question would be, 'If these traders got caught, how many others are engaging in unscrupulous practices in the oil industry and on stock trades?

I feel as if it's the tip of a very large iceberg, and that there must be some way to put a stop to it. The consumer suffers while the conglomerates drown in money. It's called 'criminal' for a reason. (via money.msn.com)