NEW YORK, May 25 (UPI) -- Three energy companies have been charged in a U.S. district court in New York with manipulating crude oil prices from January to April 2008.
The U.S. Commodity Futures Trading Commission filed a civil enforcement action against Parnon Energy Inc. of California, British company Arcadia Petroleum Ltd., its Swiss counterpart Arcadia Energy and two private citizens for manipulating crude oil futures on the New York Mercantile Exchange during the first quarter of 2008.
"According to the allegations, defendants conducted a manipulative cycle, driving the price of (West Texas Intermediate light sweet crude oil) to artificial highs and then back down, to make unlawful profits," the CFTC said in a statement.
The complaint states the accused purchased WTI to drive prices up on the NYMEX and then sold their quantities short at the artificially high prices. They then sold most of their physical holdings to drive the price down and make a profit off the short sale.
"The scheme artificially increased the price of crude oil physical, derivatives and other oil products in the United States and elsewhere," the CFTC said in the complaint.
Crude oil prices topped $145 in July 2008 before the global economic meltdown pushed crude to less than $50 per barrel by the end of that year.
The companies and individuals named in the complaint lost money when they sold the crude oil but made more than $50 million in profits on the derivatives sale.
The commission alleges the activity stopped once the entities became aware of an investigation.
None of the companies or individuals names in the complaint offered public comments on the charges.