El Paso natural gas traders sentenced to prison

Hooray! Now that’s out of the way and everyone know’s where I stand, let me continue.

Most energy commodities traded are settled on the basis of a third-party price report.  I used to be a price reporter. It’s not a terrible job…except for having to deal with people blatantly trying to manipulate where you end up placing the price all day every day. Your part in the process is to talk to enough people who actually participated in the market (be it gasoline, vacuum gasoil, LPG, benzene, crude oil, natural gas… whatever) on that particular day to be able to throw out the bad data points and post a price accurately reflecting where trades occurred.

Ah, the smirk of repentence. Michelle Valencia, sentenced to 57 months in August 2008

Some days went by quick and easy: no contention, lots of activity = clear price. Other days you’d spend the entire time being threatened, belittled, cajoled, flattered, etc., by people obviously on the ‘wrong’ side of whereever the market was moving. And that’s the thing they never got: how transparent and desperate they were. Anybody doing the price reporting job reasonably well KNOWS where the market is, and no amout of tom-foolery is going to make it anywhere else.

Because of this, when I read Tom Fowler’s article in the Houston Chronicle today and see things like former managing director James Brooks saying: “I am a sinner. If I have caused anyone pain or suffering I pray in the name of my Lord Jesus Christ they forgive me. I made a mistake of listening to another man. I trusted him blindly,” my reaction is “Fuck you. Happy you found ‘Jesus’ because you obviously were unacquainted with him at the time. Maybe he’ll save your ass in the hereafter, but in the meantime go rot in jail. You were a greedy son-of-a-bitch and got what you deserved. You were trying to maximize YOUR paycheck asshole.”

Another El Paso employee, Wes Walton was also found guilty of market manipulation and cried about how long he was going to have to go away for (11 years). Boo-f-ing-hoo. Prosecuters played phone conversations in which Walton used profanity in his attempts to maniupulate price reporters. His post-sentencing response? “I am a good person. I was very embarrassed by the way I sounded on those the tapes. I’m a good father. I believe if you had a chance to meet my sons you’d see I’m not the raving lunatic on those tapes.”

Oh yes you are fuckhead. I never talked to you, but I talked to plenty like you. You’re not being persecuted. Your crime was not victimless. In your attempts to do whatever it took to enrich yourself you artificially inflated the price us common folk you so disdain pay for the energy we need to stay warm and cook our food. Looks like Jr.’s about to join the real world asshole.

He continues: “But I’m a trader, and a trader can’t be successful if they don’t have a lot of confidence in themselves.”  I dunno…maybe a trader can be successful by managing his book properly, or keeping something other than his OWN bottom line in mind? Just kind of thinking out loud here. 

I like the fact these fucks signed up for substance abuse programs in prison in order to get their sentences shortened. I’m sure if the state offered them the ability to lop off another year for denouncing the evils of the market they abused they’d do that too. After all, being willing to say or do anything to advance themselves is what got them where they are.

In an earlier blog entry Mr. Fowler reported the CFTC had gathered $445 million in fines from dozens of companies that took part in the false reporting.

False prices were reported to Platts’ Inside FERC’s Gas Market Report.

12 thoughts on “El Paso natural gas traders sentenced to prison

  1. I was a juror on this case… the law is the law and it was clear what was going on. I could go on about what happened for days…but in the end- we made the decision that was right for the facts that were presented.

  2. Actually Chris I was there, and yeah I am pissed. I’m not “one” of them. I don’t have to clear anything up, and there you go assuming again. You have no idea if I’m “simple folk” or not! It’s very upsetting when your child goes on the internet and finds CRAP like this and reads it. That’s what the tantrum is about. I guess you’re Mr. Know-It-All……………………like I said, don’t be such a hater!

    1. No, you don’t HAVE TO clear anything up, I just thought if you had ‘facts’ that were going to counter the stuff I “made up” you might want to share them. But if not, that’s fine too. I’m not sure how that would have worked anyway since, again, I was simply relating the experiences I actually had.

      I don’t know it all, I just know what I know. If you shared what you know, then I’d know that too.

  3. Great, so let’s leave the “truth” comment off the page. Whateverrrrrrrrrrrrrrrrrr lamo. It’s okay for Chris to call these people all kinds of names and use profanity, but then when someone else does it it’s not ok? Don’t be such a hater Chris……………………

  4. Chris you’re an Ahole dude. You don’t have a fucking clue about any of these ppl.. Oh, and yeah, you’re the one that’s a Fhead. You are right about one thing, YOU DON’T know any of these men so DON’T make shit up, and assume they are all the same. All of you idots making all these comments don’t have a clue at all. Most of you just read what is printed in the papers, and OMG it must be true if it’s on the news, or it must be true if the GOVERNMENT says it. He wasn’t using profanity to help “maniupulate” the market. Gee, you are so fucking stupid. Yeah, I’m pissed, cause I do know the facts, all the facts. Get your fucking facts straight before you start saying stupid shit on the internet and YOUR kids read it! YOU need to get a life! Lets give you a gold star, you’re so smart, NOT!

    1. Hi Mom —

      For someone with all the facts at your fingertips you sure seem to have a hard time doing anything but throwing a tantrum. Why don’t you gather all your facts, organize them in a way that is intelligible to us simple folk, and present them? Sounds like that would clear everything up. Your failure to do so suggests maybe the facts aren’t as straightforward as you suggest.

      I didn’t make anything up. I didn’t read much about this. I had actual experiences which I shared here.

      You’re pissed because you’re (clearly) one of them and I’m (probably) right. Sucks to be you.

  5. I’d like to see a bit of a lesser sentence for this guy, but include all the losers that were day trading under him and giving false information. Instead, these traders sold their soul for immunity. I don’t think they should have been granted that.

  6. The look on that woman’s face in the picture…it bugs me. Absolutely no remorse. I hope things go badly for her in jail.

  7. I knew someone who did Federal time on a drugs charge. He copped to a non-existent substance abuse problem to enter the program and got a year sliced off.

    It’s part of ‘rehabilitating’ them to reenter society. That and the system’s gotta keep ’em moving through.

  8. “I like the fact these fucks signed up for substance abuse programs in prison in order to get their sentences shortened.”

    WHAT?! WHAT?! So if a fifteen-year-old pothead gets caught shoplifting an iPod, he’ll get a break if he goes in for drug counseling? I don’t think so.

    For our sins, you and I tracked market prices. That was our penance. That was our nightmare.

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