BP faces over $28 million fine as FERC judge upheld price rigging charges

BP has been in a series of multimillion-dollar fines involving oil spills, anti-money-laundering issues and most recently, its price rigging case. After the ruling, BP states that "FERC has no jurisdiction over the trading at issue in any event."

Federal Energy Regulatory Commission (FERC) judge Carmen Cintron ruled last week that BP manipulated the swap futures contracts' price against indices after the 2008 hurricane Ike, the Financial Times reports. The judge says that the company used its position as the biggest physical gas trader in North America to control the Gulf coast gas market. FERC lawyers believe that BP traders saw the disastrous event as a chance for a "potential windfall" of profits. BP states that FERC claims are entirely without merit. BP submitted a recorded conversation between a trainee and a manager to push a case against the individuals instead of the whole company.

Trainee Clayton Luskie was on a recorded phone conversation with his manager asking his opinion about a move that was aimed to impress executives, according to This is Money. Luskie prompted the call after telling executives how his team drove down prices and profit from it. His manager repeatedly interrupted the conversation which was later continued on unmonitored mobile phone lines. It was followed by a FERC investigation in 2011 charging BP of gas price rigging which was upheld in its ruling last week.

Meanwhile, gas prices went up in the Twin Cities and was allegedly caused by a BP refinery shutdown in Whiting, Indiana. According to Gasbuddy.com analyst Patrick DeHaan, the 7th largest refinery in the US which processes more than half of its capacity had problems with its crude distillation unit. US Representatives from the states of Michigan and Indiana sent a joint inquiry letter to BP asking for an explanation. Bill Schuette, Michigan Attorney General did the same on Friday.