ICIS Heren, the energy price-reporting agency, fired Seth Freedman two months after he went to regulators and the press with allegations of attempted price manipulation by natural-gas traders.
Freedman’s contract as a reporter in London was terminated on Dec. 28, according to a letter obtained by Bloomberg News that was sent to him by Graeme Roy, Reed Business Information Ltd.’s human resources director. He was offered three other roles within the company on the same terms and conditions, which he turned down, RBI said today in a statement.
Freedman was fired because it was no longer practicable for him to work within the price-reporting team after covertly recording them and making derogatory comments about them in the press, according to the letter. Paul Abrahams, a London-based spokesman for RBI, declined to give any further details when contacted by telephone. ICIS Heren is a unit of RBI.
“It beggars belief that RBI have deigned to dismiss the very person who raised issues of alleged wrongdoing,” Shah Qureshi, Freedman’s legal representative at Bindmans LLP in London, said today by phone. “It appears he has been made a sacrificial lamb as a result of this.” Freedman’s dismissal is subject to an appeal, Qureshi said.
The U.K.’s $480 billion gas market came under the spotlight in October after Freedman reported deals he suspected were being done below prevailing levels. Freedman, a former broker at Insinger de Beaufort NV and Eden Financial Ltd., notified his managers of what he suspected was an attempt to manipulate assessments on Sept. 28.
ICIS reported the case to the Office of the Gas and Electricity Markets, saying there had been “a series of deals done below the prevailing market trend,” according to a Nov. 12 statement.
Ofgem, as the regulator is known, said in a Nov. 13 statement it was investigating. The Financial Services Authority, or FSA, also said Nov. 12 it had received the information.
“Traders run roughshod over unsuspecting, under-trained journalists, leaning on them to influence the final prices in their favor,” Freedman, 32, who joined ICIS in January, said in a Nov. 16 phone interview. “Traders tried to influence me regularly.”
Reporters working for ICIS receive “extensive training” and are equipped to challenge any information they receive, Abrahams said Nov. 29.
The International Energy Agency, OPEC and the International Organization of Securities Commissions said in an October 2011 report that “there is a risk that a price-reporting agency’s benchmark price can be manipulated by the submission of false prices or by over- or understating the volume transacted.”