As David reported earlier, today’s Guardian carries allegations of price-fixing in the energy markets. The paper has an account by Seth Freedman, who worked as a price reporter at ICIS Heren, detailing how he observed suspicious trades that looked like attempts to manipulate the daily index price.
Based on Freedman’s account, the alleged manipulation looks very much like that employed by City traders in the recently-exposed Libor scandal. Ironic, then, that the ‘suspicious’ trades Freedman observed came on the same day as Martin Wheatley published his review of Libor for the Treasury: Friday 28 September. Even after bankers had resigned and as new regulations for that sector were being planned, traders in the £300 billion wholesale gas market may well have been playing a very similar game.
What Freedman saw were several trades of ‘day-ahead’ gas contracts at abnormally low prices just as his company, ICIS Heren, was collecting information to set its benchmark index.
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