US Justice Department alleges suspicion manipulation in Platts benchmarks
The U.S Justice Department is having an investigation for the suspected manipulation of the energy pricing benchmarks that S&P Global Platts has published. It has expanded the crackdown of the agency on the misconduct in the market of global commodities.
London- based Platts is a data and news provider. It focuses on energy, metal, and agricultural commodities. The company is collecting data for traders on their deal prices to determine a market price for physical commodities.
The prosecutors of the US are probing the suspect and manipulative behavior of the individual traders. At the same time, it is submitting those deal prices to the price assessment for oil and other energy benchmarks of Platts. The four people have said it without specifying which one. The people have declined to come to the forefront as the probes are not public.
With the pushing of those benchmark prices up and down, traders can boost up their profits.
Over the last years, US authorities have brought two of the cases regarding alleged manipulation for the Platts’ oil benchmarks of the traders at two different companies.
However, the prosecutors are now probing similar kinds of behavior across the market. The industry-wide probes have opened up for a new front in the crackdown of the Justice Department for bribery, fraud, and the manipulation of the market commodity. It is raising the stakes for traders and the companies on a global scale, which daily use the benchmark of Platts.
The sources have said that prosecutors are focusing on the behavior of the traders. They have not yet given any indication of the wrongdoings of Platts.
The Justice Department alleged that from September of 2012 to August of 2016, Emilio Jose Heredia Collado had directed colleagues to place buy or selling orders during the trading settlement of Platts.
“In both these cases, the regulators did not accuse Platts of wrongdoing or provide any evidence that attempts to manipulate our assessments were successful or that our assessments did not reflect market value,” Platts said in a statement.
Heredia had successfully swayed benchmark prices to benefit himself and his employees. He is cooperating with an investigation. His attorney has not yet responded. Other Commodities traders are now under scrutiny.