Western Gas Resources will pay $5.95 million to settle allegations that it manipulated the prices of natural-gas futures on the New York Mercantile Exchange.
The agreement with a group of NYMEX natural-gas futures traders ends Western Gas Resources’ involvement in a 2003 case against several gas companies. Denver-based Western Gas was sued in September, and the suit was consolidated with the others in October. It announced the settlement, which still must be approved by a federal judge, Thursday.
The traders alleged Western Gas manipulated the prices of gas futures by reporting false information to trade publications that compile and publish indices of natural-gas spot prices.
Western Gas paid the U.S. Commodities Futures Trading Commission $7 million in July 2004 to settle charges of reporting false gas prices.
In April, the commission filed suit against former Western Gas trading manager Andrew K. Richmond, alleging he pressured his traders to report false information from natural-gas transactions to an industry-pricing index service.
Richmond and Western Gas allegedly profited from the price manipulations by increasing the spread between gas prices at two delivery locations. Gas could then be purchased at the lower-priced location, transported to the higher-priced location and sold there for greater profit.
In none of the cases has Western Gas admitted wrongdoing.
Staff writer Greg Griffin can be reached at 303-820-1241 or ggriffin@denverpost.com.
