Traders sued for crude price manipulation

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NEW YORK, May 27 (UPI) -- Two oil trading companies and traders were sued in federal court in New York for allegedly manipulating crude oil prices on the NYMEX, a lawsuit states.

Derivatives trader Stephen Ardizzone filed a class action suit in the U.S. District Court for the Southern District of New York against Parnon Energy and Arcadia Energy and two trade directors, Nicholas Wildgoose and James Dyer. The suit claims they manipulated crude oil prices on the New York Mercantile Exchange before the global financial collapse.

"Beginning at least as early as Dec. 1, 2007, and continuing until a date unknown to plaintiff, but believed to extend at least until May 31, 2008, defendants unlawfully manipulated the prices of NYMEX (West Texas Intermediate light sweet crude oil) derivatives contracts," the Platts news service quoted the class action suit as stating.

The suit parallels charges brought this week against the traders by the U.S. Commodity Futures Trading Commission.

The CFTC suit claimed the traders manipulated oil markets during the first quarter of 2008. That activity, the CFTC claims, generated $50 million in profits.

Crude oil prices in the summer of 2008 topped $147 per barrel before the global economic meltdown pushed crude to less than $50 per barrel by the end of the year.

Arcadia in a statement denied the CFTC charges.