An Illinois private placement fund mounted a putative class action against BP PLC, Royal Dutch Shell PLC and Statoil ASA in New York over the alleged crude oil futures manipulation scheme that was disclosed in a recent European regulatory sting.
White Oaks Fund LP is suing the energy companies over a purported plot to manipulate the price of North Sea Brent crude oil and Brent crude oil futures contracts by providing bogus pricing information to Platts, which publishes benchmark price assessments in the energy sector.
BP, Shell and Statoil have been barraged by suits since acknowledging that they were among the companies hit in a surprise raid launched by the European Commission and the Norwegian Competition Authority in May. Platts, a McGraw Hill Financial Inc. division, confirmed that its London offices were also targeted in the investigation.
“Defendants purposefully manipulated prices of Brent crude oil and Brent crude oil futures contracts through their deliberate and systematic submission of false Brent crude oil trade information to Platts,” White Oaks said. “Defendants … knew, as sophisticated market participants, that the (mis)information they reported impacted the prices of Brent crude oil futures contracts and other Brent crude oil derivative contracts traded in the U.S.”
White Oaks is suing for violation of the Commodity Exchange Act and the Sherman Act on behalf of anyone who bought or sold a Brent crude oil futures contracts on the New York Mercantile Exchange and the Intercontinental Exchange between 2002 and the present, according to the suit.
The energy giants have now been hit with at least a half dozen suits by a number of other trading firms and private citizens over the alleged price fixing, including Prime International Trading Ltd., which filed the earliest known private antitrust suit in May.
The suits come on the heels of the mid-May surprise inspection of several companies in the crude oil, refined oil products and biofuel sectors by the EC, which said it was looking into concerns that the companies might have colluded to distort benchmark rates for a range of oil and biofuel products.
The watchdog said it was additionally worried that the companies might have shouldered out other energy companies that sought to take part in the price assessment process in order to skew the published rates.
If true, the allegations may be a breach of both the bloc’s ban on cartels and restrictive business practices as well as its rules on abuse of dominance, according to the EC.
The NCA, which oversees competition issues in Norway, raided the offices of Statoil at the EU’s request. Norway is not part of the EU bloc, but is a member of the European Economic Area, over which the EC has authority for competition matters.
At least one U.S. congressional representative has urged the U.S. attorney general’s office to coordinate with European authorities in the probe, which has already been joined by the U.K. Serious Fraud Office.
In a letter shortly after the raids were revealed, Senator Ron Wyden, D-Oregon, pushed the U.S. Justice Department to determine whether the allegations spill over into the U.S.
The case is White Oaks Fund v. BP PLC et al., case number 1:13-cv-04553 in the U.S. District Court for the Southern District of New York.