DENVER (LAWFUEL) – Mathew Reed, age 36, of Salt Lake City, Utah, was sentenced late yesterday by Chief U.S. District Court Judge Wiley Y. Daniel to serve 5 months imprisonment, followed by 5 months of home detention with electronic monitoring, for wire fraud for reporting false natural gas trade information to manipulate the published natural gas index prices. Following his prison sentence, Reed is to spend 3 years on supervised release. Chief Judge Daniel also ordered Reed to pay a fine of $6,000, which is in addition to large fines the defendant paid in related regulatory and civil cases. No date has yet been set as to when Reed is to report to prison.
Mathew Reed was indicted by a federal grand jury in Denver on May 9, 2007. He pled guilty before Judge Daniel on February 28, 2008. He was sentenced on November 20, 2008. Reed, a natural gas trader, worked for a South Dakota corporation named Enserco Energy, Inc. in their Golden, Colorado office. His job was to buy and sell natural gas for a profit. Gas traders used trade publications, such as Gas Daily, a McGraw-Hill owned publication, to determine the price in natural gas transactions.
According to the stipulated facts contained in the plea agreement, from May 2000 through June 2002, Reed, devised a scheme to defraud Gas Daily price reporters as well as his counter-parties in natural gas transactions, by falsely reporting natural gas price and volume information. The purpose of the false reporting scheme was to manipulate the published volume-weighted index prices and thereby increase Reed’s profit on trades of natural gas.
“Manipulating the energy markets leaves the rest of us holding the bag,” said United States Attorney Troy Eid.
“Greed does not pay,” said FBI Special Agent in Charge James Davis.
This case was investigated by the Federal Bureau of Investigation.
Reed was prosecuted by Assistant U.S. Attorney James Hearty.