Oil Traders Lose Bid to Delay Document DisclosureBob Van Voris
Crude oil traders including Morgan Stanley and Royal Dutch Shell Plc lost a bid to temporarily block disclosure of millions of trading records and other documents from a six-year U.S. probe while an appeals court hears the case.
The federal appeals court in New York today denied the request, lifting a temporary stay on the disclosure entered Nov. 20. The court today also denied the oil traders’ request that it hear their appeal on an expedited basis.
U.S. District Judge William H. Pauley on Oct. 25 ordered the documents, originally gathered by the Commodity Futures Trading Commission as part of a probe begun in December 2007, to be given to a group of private plaintiffs claiming price-fixing in the crude-oil market. Pauley restricted access to the most sensitive material.
The files include e-mails, depositions, trading records and audio files.
The CFTC on May 24, 2011, accused Parnon Energy Inc., which is controlled by billionaire John Fredriksen, of manipulating the prices of West Texas Intermediate crude. Two days later, a private plaintiff sued Parnon, seeking to represent a class of everyone who traded in WTI derivative contracts from Dec. 1, 2007, until at least May 31, 2008.
Pauley hasn’t yet ruled whether he’ll let the case proceed as a class action.
The case is In Re Crude Oil Commodity Futures Litigation, 11-cv-03600. The CFTC case is U.S. Commodity Futures Trading Commission v. Parnon Energy Inc., 11-cv-3543, U.S. District Court, Southern District of New York (Manhattan). The appeal is U.S. Commodity Futures Trading Commission v. Parnon Energy Inc., 13-04206, Second U.S. Circuit Court of Appeals (Manhattan).