Exchange Fines BP $2.5 Million Over Trades

BP, the largest oil and natural-gas producer in the U.S., was fined $2.5 million Tuesday by the New York Mercantile Exchange to settle allegations of improper crude oil trades.

The allegations against the London-based company’s subsidiary, BP Corp. North America, included violations in January 2001 and August 2002 and conduct detrimental to the welfare of the exchange, Nymex said in a disciplinary statement.

“We’re pleased to have this matter behind us,” a BP spokesman said. “We have not admitted nor denied any violation of Nymex rules.”

The settlement included an agreement by BP to “upgrade our supervision of trading activities,” the spokesman said.

Nymex officials declined to comment other than to provide the disciplinary statement, which alleged two counts of so-called wash trades, a tactic by which traders collude to buy and sell contracts between themselves at the same price, to artificially inflate trading volumes.

In July, in a separate probe, BP agreed to pay $3 million for low-income energy-assistance programs as part of a settlement of charges by the Federal Energy Regulatory Commission that it profited from phony West Coast power trades during 2000-01.

BP’s New York-traded shares rose 16 cents to $43.03.

From Bloomberg News