United States v. Mark David Radley, et al.

Analysis Group was retained by a joint defense group representing several former natural gas liquids (NGL) traders who were accused of manipulating and/or attempting to manipulate the market for propane (TET propane). The US Department of Justice alleged in this criminal case that the traders caused a price spike in TET propane both by cornering and attempting to corner the market, and by engaging in certain trading behavior, such as making show offers and bid stacking. 

In connection with this case, an Analysis Group team including Managing Principals R. Jeffrey Malinak, Andrea Okie, and Lisa B. Pinheiro; Principal Jimmy Royer; and Vice President Ajay Jyoti, performed research and analysis in the areas of market power, artificial price, market microstructure, trading behavior and trading platforms, and regulation, among others. As part of this work, the Analysis Group team developed a detailed understanding of the NGL midstream industry structure and operations, the way in which the Oil Price Information Service (OPIS) set the relevant benchmark prices for various NGLs (including propane) and natural gas, and the manner in which TET propane contracts were traded and priced on the relevant trading platform. Our work on this matter spanned several years and covered many facets of the economics and finance of commodity, and financial market manipulation.

The defense won a dismissal of the case at the trial court level prior to the filing of expert reports addressing market power, artificial price, and internal trading controls. The case was upheld on appeal.