(CNN) -- Federal regulators investigating possible price manipulation of crude oil are probably looking at what role collapsed energy giant Enron may have played, a former government official said Friday.
Federal regulators are looking at the price of crude oil, which ultimately is reflected at the gas pump.
On "American Morning," Michael Greenberger, who once led the Commodity Futures Trading Commission's Division of Trading & Markets, said, "almost certainly, what they're looking at is as a result of Enron pushing for having energy futures contracts being done outside of the United States' regulatory purview.
"There is a theory that has gained momentum among economists and market observers that the price of crude oil is being driven up not by supply/demand principles in whole but by speculators who are using what are called dark markets, markets that can't be watched by the public or regulators, to manipulate the price of crude oil and, therefore, gasoline and heating oil in an upward direction," he said.
He added, "It would be as if you said you could trade stocks on the New York Stock Exchange, but you could also trade stocks somewhere where the Securities [and] Exchange Commission had no idea what was going on, and at the behest of Enron in late 2000 in a lame-duck Congress, this kind of unregulated trading was permitted."
The Texas-based Enron collapsed in 2001 after revelations of fraudulent accounting practices. Several former executives were convicted and sentenced to prison terms on charges relating to the accounting scheme. The fall of the company cost 4,000 employees their jobs and many of them their life savings, and the collapse led to billions of dollars of losses for investors.
Greenberger is now director of the University of Maryland's Center for Health and Homeland Security.
The Commodity Futures Trading Commission said Thursday that it is six months into a nationwide crude oil investigation, with a focus on possible price manipulation. The commission said it is publicizing the investigation because of "unprecedented market conditions."
"In addition to the CFTC's ongoing examination of the role of fundamental economic forces and new investors in the recent commodity market price increases, the agency continues to pursue one of its primary missions -- to 'deter, detect, and punish futures market manipulation,' " according to a written statement from the commission.
Sen. Maria Cantwell, D-Washington, said on CNN's "Issue No. 1" Friday that she and other lawmakers sent a letter last week to the commission, pressing them to take action.
"There is more regulation on hamburger in America, trading on the futures cattle market, than there is oil, and yet oil is critical to our U.S. economy," she said.
|Most Viewed||Most Emailed||Top Searches|