Page 1 of 1

Insider Trading Investigation in the Commodities Markets

Posted: Tue Apr 08, 2008 8:10 pm
by a1bion
TSIFU!
April 8 (Bloomberg) -- Seven men were charged in a joint probe by New York prosecutors and the Commodity Futures Trading Commission of front-running involving evidence tampering and bribery at the New York Mercantile Exchange.

Steven Karvellas, 48, a former Nymex director, pleaded guilty today in Manhattan state court to securities fraud in a scheme to profit ahead of trades of customer natural gas contracts. Five former floor workers and another ex-Nymex employee also were charged, Manhattan District Attorney Robert Morgenthau said. The CFTC settled civil claims against Karvellas and former floor broker Thomas Maloney.

``By allocating profitable order fills to their accounts and less profitable prices to their customers, these defendants were able to rig the system and call `bingo' after the game was over,'' Gregory Mocek, director of enforcement at the CFTC, said today at a press conference at Morgenthau's offices.

Karvellas used the purchase and sale of the contracts from September 2002 to May 2003 to trade for himself, according to court papers. He pleaded guilty today in New York State Supreme Court in Manhattan, a trial-level court, agreeing to five months in prison, five years probation and $850,000 in fines and costs.

Karvellas delayed ``the allocation of customer orders to see what direction the market was moving,'' according to the plea agreement. ``When the market price made the order profitable, he would then allocate the contracts to himself.''
http://www.bloomberg.com/apps/news?pid= ... refer=home

Insider Trading Investigation in the Commodities Markets

Posted: Wed Apr 09, 2008 2:30 am
by TheTodd
Five months? Guess it sounds like he is cooperating so they are being lenient.