Exclusive: U.S. Justice Department Investigates Suspected Manipulation of Platts Benchmarks

By Chris Prentice and Jody Godoy

WASHINGTON – The U.S. Department of Justice is examining potential manipulation of energy pricing benchmarks published by S&P Global Platts, marking a significant escalation in the agency’s efforts to address misconduct in the global commodities market, according to four sources familiar with the situation.

Platts, headquartered in London, specializes in providing data and news on energy, metal, and agricultural commodities. The firm gathers pricing information from traders to establish daily market prices for various physical commodities.

U.S. prosecutors are investigating allegations of manipulative conduct by individual traders when they submit pricing information for Platts’ assessments, particularly concerning oil and other energy benchmarks, though specific benchmarks were not disclosed. The sources chose to remain anonymous due to the confidential nature of the investigations.

Traders can enhance their profits by influencing benchmark prices. Over the past year, U.S. authorities have filed two cases involving alleged manipulation of Platts’ oil benchmarks by traders from different firms, but the current inquiry is casting a wider net across the market.

This previously unreported, broader investigation represents a new aspect of the Justice Department’s crackdown on fraud, bribery, and manipulation in commodities trading, significantly impacting traders and companies globally that rely on Platts’ benchmarks for pricing contracts worth billions.

The investigation focuses on traders’ conduct, with no indications of wrongdoing by Platts itself. The company publicly outlines its methodology for price assessments, which includes measures designed to ensure data integrity, such as the engagement of an independent external auditor to review its compliance with said methodology.

In response to inquiries, Platts stated that it actively reviews the integrity of its price assessments and publishes relevant data and correspondence used to formulate these assessments, making this information available to regulators as needed.

Over the last decade, global authorities have imposed multi-billion-dollar fines and pursued criminal charges against banks and traders for colluding to manipulate global benchmarks, notably the London Interbank Offered Rate. Although U.S. authorities previously targeted energy traders for benchmark manipulation during the 2000s, subsequent oversight primarily fell to civil agencies like the Commodity Futures Trading Commission (CFTC) and the Federal Energy Regulatory Commission.

Since 2019, however, the Justice Department, in collaboration with the CFTC, has intensified its scrutiny of the commodities market through a specialized unit within its fraud division. This unit has developed advanced data analytics tools to expedite the detection of misconduct.

Initially, the focus was on commodities futures spoofing—where traders place orders to create the illusion of high demand or supply before canceling them to exploit the market’s reaction. The unit, however, has since gained capacity to investigate other areas, including industry benchmarks managed by price reporting agencies.

Additionally, the agency has scrutinized major energy trading firms for bribery, as seen in cases involving companies like Vitol.

When settling bribery charges with the Justice Department, Vitol also resolved related allegations with the CFTC, resulting in a civil penalty for attempting to manipulate two Platts physical oil benchmarks. Vitol expressed its commitment to compliance during the investigation, neither admitting nor denying the CFTC’s claims.

In a separate case, a former oil trader at Glencore pleaded guilty to conspiring to manipulate the Platts benchmark for a specific type of oil, allegedly directing peers to influence buy or sell orders during a crucial Platts trading settlement window. He is currently cooperating with an ongoing investigation.

Platts has indicated that in the cases brought against traders, regulators did not accuse it of any wrongdoing or provide evidence that manipulation was successful or that the assessments did not reflect true market value.

The Justice Department is also examining other commodities traders, including Gunvor Group, which is under investigation for corruption related to activities in Ecuador after a former employee pled guilty to bribery charges.