DOJ probes suspected manipulation of Platts benchmarks: Sources

(Reuters) — The U.S. Department of Justice is investigating suspected manipulation of energy pricing benchmarks published by S&P Global Platts, expanding the agency’s crackdown on misconduct in the global commodities market, according to four people familiar with the matter.

London-based Platts is a data and news provider that focuses on energy, metal and agricultural commodities. The company collects data from traders on their deal prices to determine a daily market price for a number of physical commodities.

U.S. prosecutors are probing suspected manipulative behavior by individual traders when submitting those deal prices to Platts’ price assessments for oil and other energy benchmarks, the four people said, without specifying which ones.

The people declined to be named as the probes are not public.

Over the past year, U.S. authorities have brought two cases of alleged manipulation of Platts’ oil benchmarks by traders at two different companies, but prosecutors are now probing similar behavior across the market, the sources said.

The previously unreported, industrywide probe opens up a new front in the Justice Department’s crackdown on fraud, bribery and manipulation in the commodities market, raising the stakes for traders and companies globally that daily use Platts’ benchmarks to price billions of dollars’ worth of contracts.

The sources said prosecutors are focused on traders’ behavior and gave no indication of suspected wrongdoing by Platts.

In response to a request for comment by Reuters, Platts said it conducts reviews to ensure the integrity of its price assessments. Platts publishes data and correspondence used to determine a price assessment and provides this data to regulators when requested, said Dave Ernsberger, global head of pricing and market insight for S&P Global Platts.

“We’ve spoken with U.S. and global authorities across a whole range of markets for many years,” Mr. Ernsberger said.

He declined to comment on any potential probes.

A spokesperson for the Justice Department declined to comment.

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