U.S. regulators filed suit Tuesday against two oil traders and two trading firms owned by Norwegian billionaire John Fredriksen for allegedly manipulating prices in 2008. The suit is the first part of the government’s largest-ever crackdown on companies for allegedly making some $50 million in profits in 2008 by squeezing markets. The Commodities Futures Trading Commission said traders James Dyer of Oklahoma’s Parnon Energy and Nick Wildgoose of Europe-based Arcadia Energy both used their positions to create the impression of tight supplies to boost prices, and then allegedly later dumped those barrels into the market—causing the prices to crash. The lawsuit says the CFTC may collect damages as much as triple the monetary gains derived from the illicit trading practices—although these types of lawsuits are historically hard to prove.
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