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Arcadia Petroleum Futures Trading Investigation

by John Fabry

Bailey & Galyen is investigating potential claims on behalf of investors in light sweet crude oil futures or options contracts in early 2008. According to a complaint filed by the Commodity Futures Trading Commission (CFTC), traders at Arcadia Petroleum Ltd., a Swiss commodity-trading firm, manipulated the price of oil at America’s central oil hub in Cushing, Oklahoma, in January and February of 2008. The oil traders, Nicholas Wildgoose and James Dyer, are alleged to have entered into forward contracts to buy 4.6 million barrels of oil for physical delivery in February, an amount that represented 66 percent of their beginning-of-month estimate of the total physical Cushing market. Between January 3 and January 16, the pair is alleged to have also bought approximately 13,600 February futures contracts (equivalent to 13.6 million barrels of oil) and sold the same number of March futures contracts. They allegedly did so to manipulate the price of derivatives tied to the value of oil prices at that hub. More specifically, it is alleged that by creating the appearance of temporarily tighter conditions in the physical market, the February futures price would rise relative to the March and the traders would profit as they closed out their futures positions between January 16 and January 22.

If you would like to discuss your rights and interests as an investor, or have information relating to this investigation, please contact John Fabry at Bailey & Galyen’s Houston office at 381-335-7744 or by e-mail at jfabry@galyen.com.

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