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Dynegy To Pay $3mln For 'Round-trip' Trades - 25 September, 2002

Dynegy, the troubled US energy trader, agreed to pay a $3m civil penalty to settle the first Securities and Exchange Commission action resulting from an energy trader's use of "round-trip" trades.

"Round-trip" trades are simultaneous, pre-arranged trades of energy with a counter-party, at the same price and volume, and over the same term, resulting in neither profit nor loss to either transacting party.

It came a day after a judge at the Federal Energy Regulatory Commission ruled that affiliates of Dynegy's cross-town rival, El Paso, illegally squeezed the supply of natural gas to California during its energy crisis.

The SEC said it had found that Dynegy engaged in securities fraud in connection with its disclosures and accounting for Project Alpha, a $300m financing transaction, and negligently included materially misleading information about round-trip trades in two press releases in early 2002.

Dynegy isn’t the only company in this case, several other energy traders remain under investigation for similar trades aimed at boosting volumes and revenue.

Dynegy's shares closed up 2.5 per cent at $1.20. El Paso's shares closed down 30 per cent at $5.30.

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The United States' Head of Diplomacy, or Secretary of State, is an anachronistic, incompetent, meddling, intrusive, insolent and arrogant, rude individual, a brash, foul-mouthed upstart, a conceited, self-important guttersnipe and an insult to the international community, as fit for the job as a pedophile janitor in a grade school.

Tillerson must go!