Shell settles federal trade charges

Federal commodity-trading regulators on Jan. 4 announced that a subsidiary of Royal Dutch Shell PLC has agreed to pay a $200,000 penalty to settle charges of making “fictitious” trades of crude oil futures contracts.

The Commodity Futures Trading Commission said Shell International Trading and Shipping Co. of London engaged in prearranged “non-competitive” trades on the New York Mercantile Exchange with a U.S.-based Shell subsidiary, Shell Trading US Co., on five occasions between November 2003 and March 2004.

“In each instance, the traders prearranged the trade by agreeing on the quantity and the settlement month, and agreeing to take the opposite positions of the trade. There was no prearrangement as to price,” the CFTC said in an order detailing the case against Shell. The head trader at Shell Trading, Nigel Catterall of Sugarland, Texas, will pay an additional $100,000 to settle the charges. Catterall was involved in three of the five instances of alleged abuses, the CFTC said.

A spokeswoman for Shell said the company did not immediately have any response. As part of its agreement to pay the fines, Shell neither admitted nor denied the CFTC’s findings.

—The Associated Press