TotalEnergies Unit Fined for Trying to Manipulate Gasoline Futures Market

The U.S. Commodity Futures Trading Commission (CFTC) has fined a trading unit of French supermajor TotalEnergies for attempted manipulation of the gasoline futures market in 2018.

The U.S. market regulator ordered TOTSA TotalEnergies Trading SA, formerly known as TOTSA Total Oil Trading SA (TOTSA), to pay a $48 million civil monetary penalty and cease and desist from violating the Commodity Exchange Act (CEA) and CFTC regulations.

According to the CFTC’s findings, Switzerland-based TOTSA, which is not registered with the CFTC, attempted to manipulate the market for EBOB-linked gasoline futures in March 2018 by selling physical EBOB gasoline at prices below what buyers indicated they would pay.

While the trading unit was selling physical EBOB at cut-rate levels, TOTSA maintained a large short position in March-settled EBOB-linked futures, the U.S. regulator said.

As the large short position was a bet that gasoline futures prices would drop, the sales of physical EBOB gasoline would increase in value if the reported price of EBOB declined.

“Essentially, TOTSA’s traders were willing to accept less revenue from the company’s sales of physical EBOB, in an attempt to depress the reported price of EBOB, and increase TOTSA’s overall trading profits (by boosting the value of the company’s EBOB-linked short position),” the CFTC said in its ruling.

This conduct was an attempt at market manipulation in violation of sections of the CEA and CFTC Regulation.

“The scheme in this matter involved an attack on the market integrity of CFTC-regulated futures contracts on gasoline, and this settlement demonstrates such attacks will not be tolerated in any market,” said Director of Enforcement Ian McGinley.

The CFTC has accepted TOTSA’s offer of settlement, recognizing that the company provided some cooperation during the investigation of this matter.

However, TOTSA failed to timely produce WhatsApp communications the Division of Enforcement requested or adequately preserve these communications following DOE’s request, with the result that potentially relevant evidence was unavailable to DOE.

By Tsvetana Paraskova for Oilprice.com

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