“Some of the world’s biggest oil companies may have a new mess on their hands.
“The European Commission raided the offices of Shell, BP and Norway’s Statoil this week as part of an investigation into suspected attempts to manipulate global oil prices spanning more than a decade.
“None of the companies have been accused of wrongdoing, but the controversy has brought back memories of the Libor rate-rigging scandal that rocked the financial world last year.
“UBS, Royal Bank of Scotland, and Barclays have already reached settlements with regulators in the U.S. and U.K. over Libor-rigging, paying over $2.5 billion in fines after admitting to attempts to manipulate interest rates to appear more credit-worthy and to benefit trading positions. Roughly a dozen other global banks remain under scrutiny over rate-rigging, and three people have been arrested so far.”
“Aside from the big oil companies, Wall Street banks are also big players in the energy markets who could conceivably benefit from price movements, said David Frenk, director of research at the financial reform group Better Markets and a former commodities analyst at a hedge fund. If Platts’ data was indeed manipulated, Frenk said, consumers as well as other traders took a hit.”
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