While the Commodity Futures Trading Commission denies that oil speculators are a significant factor in the surging price of oil, they have been going after speculators with a vengeance lately. Today they snagged their first by charging three top executives of Optiver Holdings. Apparently they were successfully manipulating the price so that they bought big at the end of the day to drive prices up and then sold big to make it go down again.
From CNN:
The Commodity Futures Trading Commission accused Optiver Holding, two of its subsidiaries and three employees with manipulation and attempted manipulation of crude oil, heating oil and gasoline futures on the New York Mercantile Exchange."Optiver traders amassed large trading positions, then conducted trades in such a way to bully and hammer the markets," CFTC Acting Chairman Walt Lukken said at a press conference. "These charges go to the heart of the CFTC's core mission of detecting and rooting out illegal manipulation of the markets."
In May, under the backdrop of record oil prices and calls from legislators to crack down on speculative oil trading and market manipulation, the CFTC announced a wide-ranging probe into oil price manipulation. The agency says it has dozens of investigations ongoing.
The complaint filed Thursday names Bastiaan van Kempen, chief executive; Christopher Dowson, a head trader; and Randal Meijer, head of trading at an Optiver subsidiary.
Of course there are plenty of factors that are used to determine the price of oil. A hurricane, a war, supply and demand....they're all important. Yet Optiver is just one of many speculators out there (I'm fully confident, as is the CFTC, that there will be more illegalities found) messing with the market and ultimately the price of a gallon of gas. All of them should be prosecuted to the fullest extent of the law, like all the corporate crooks out there.
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