Commodity Futures Trading Commission 

Office of External Affairs 

 Three Lafayette Centre 

 1155 21st Street, NW 

 Washington, DC 20581 

 202.418.5080 

Statement 

Statement of Acting Director of Enforcement Stephen Obie 

(As Prepared for Delivery) 

July 24, 2008 

The Commission’s Enforcement Action 

Today, on behalf of the Commission, we are announcing the filing of a civil enforcement 

action in the United States District Court for the Southern District of New York against 

Optiver Holding BV, a global proprietary trading fund headquartered in the 

Netherlands, and two subsidiaries – Optiver US, LLC (Optiver US), a Chicago-based 

corporation, and Optiver VOF, a Dutch company. The complaint also names as 

defendants Christopher Dowson, Randal Meijer, and Bastiaan van Kempen. 

Defendant Dowson is the head trader for Optiver US, defendant Meijer is the global 

head of trading for Optiver US and Optiver VOF. Defendant van Kempen is the Chief 

Executive Officer for Optiver US. 

I want to make clear that the statements contained in the Commission’s complaint, and 

my statements here today are allegations, and that the Commission is in the beginning 

stages of the litigation process. 

The alleged manipulative scheme involved trading a large volume of NYMEX Crude Oil, 

Heating Oil, and New York Harbor Gasoline futures contracts to manipulate settlement 

prices for those contracts during one month in 2007. The complaint charges all 

defendants with 19 separate instances of attempted manipulation of these contracts on 

11 days in March 2007. The complaint further alleges that at least five of those 19 

attempts were successful, causing artificial prices in certain of these energy futures 

contracts. In three of those instances, defendants forced futures prices lower, and in two 

instances, defendants forced futures prices higher, each time causing an artificial 

settlement price for their own benefit to increase their own profits. 

As alleged in the complaint, the defendants employed a manipulative scheme 

commonly known as “banging” or “marking”’ the close. “Banging the close” refers to the 

practice of acquiring a substantial position leading up to the closing or settlement 
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period, followed by offsetting the position before the end of the close of trading for the 

purpose of attempting to manipulate prices. 

The complaint further charges Optiver US and van Kempen with concealing the 

manipulative scheme and making false statements in response to an inquiry from 

NYMEX. The Commission’s case is set forth in the Complaint filed today-I will not 

speak beyond the allegations of the complaint but will give you two examples of the 

scheme. 

The Manipulative Trading Scheme

I’d like to illustrate how the alleged manipulative scheme worked, using two charts. 

The chart on my right shows the defendants’ trading on March 2, 2007 in the New York 

Harbor Gasoline futures contract. The other shows the defendants’ trading on March 

16, 2007 in the Crude Oil futures contract. 

The red line on each chart shows Optiver US’s futures position for the time period 2:22 

to 2:32. The blue line shows the futures price in the market for each contract as it 

moved over that same time period. The horizontal green line marks where the market 

settled for the day in each contract. 

These charts illustrate three things about the alleged manipulative scheme: 

 

First, the charts demonstrate how correlated futures prices were on these two days with 

the defendants’ trading. 

Second, the charts show that the defendants succeeded in their attempt to move futures 

prices on these two days. 

Third, the charts show that defendants’ scheme involved directional trading. 

 

That is to say, sometimes the defendants were attempting to force the price up and 

sometimes they were attempting to force the price down—but always in an effort to 

create an artificial settlement price in order to benefit Optiver’s book. 

Let’s take a look at the chart for the New York Harbor Gasoline contract on March 2, 

2007: 

Just prior to the beginning of the settlement period on March 2, 2007 the defendants 

took a short position of 260. Using other NYMEX contracts, Optiver US established an 

offsetting position to this 260 futures contract short position. Once the settlement period 

began at 2:28 p.m., the defendants started the snowball and continued to snowball the 

price down during the settlement period in an effort to bang the close. By forcing the 

settlement price lower, the defendants made money on all of Optiver US’s futures 

position that were executed at a price higher than the settlement price. 

The March 2, 2007 chart is indicative of the defendants’ general strategy to execute a 

significant percentage of Optiver US’s futures trades just before the close and the 
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remainder during the close. By so doing, Optiver US believed that it would profit 

handsomely. The Division has conservatively estimated that Optiver US earned a profit 

of over $190,000 on March 2, 2007 as a result of its manipulative New York Harbor 

Gasoline trading. 

As alleged in the complaint, the defendants attempted their manipulative strategy nine 

more times in the New York Harbor Gasoline futures market after March 2, 2007. On 

March 14, 2007, defendant Dowson confidently asserted “we can move the gasoline 

market.”

The second chart illustrates Optiver US’s Crude Oil trading on March 16, 2007. On 

March 16, 2007, defendant Dowson confirmed that, with regard to crude oil, he and 

another Optiver US trader decided to “just whack the oil.” 

The chart for Optiver US’s Crude Oil trading on March 16, 2007 shows how the 

defendants did exactly that. As you can see, the defendants purchased 999 Crude Oil 

futures, forcing the price up just before the settlement period. And they continued their 

pushing during the settlement. 

The Division has conservatively estimated that Optiver US earned a profit of over 

$400,000 on March 16 through its manipulative activity in the Crude Oil contract. 

The manipulative scheme occurred on other days after March 16, 2007 and the 

defendants wanted the manipulative scheme to continue. On March 19, 2007 

defendant van Kempen told another Optiver US trader: 

You should milk it for right now, as much as you can, 

because you never know how long this thing is going to last. 

Planning the Cover-Up: The “Fairy Story” 

The defendants not only thought about how to conceal their manipulative scheme, but 

also devised a cover story. Less than a week into the alleged manipulative scheme, 

defendants Dowson and Meijer discussed the story they planned to use if, in defendant 

Dowson’s words, “people come... with stories about why you manipulated the market.” 

They agreed that, among other things, they could claim that their intent was really to 

buy low and sell high. In the conversation, defendant Dowson acknowledged that their 

explanation was a “fairy story.” 

Trying to Fly Below the Radar 

In addition, the defendants deliberately attempted to conceal the manipulative nature of 

their trading strategy. On March 9, 2007—less than one week into the scheme-- 

defendant Dowson stated that he was not going to push the market so dramatically that, 

in his words “we’re talking about it on CNBC[.]” 

NYMEX Intervenes and Stops the Manipulative Scheme in Its Tracks 

The U.S. futures exchanges are frontline regulators and strong partners in our collective 

effort to quickly detect and take action to stop illegal activity. As a result of its proactive 
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surveillance program, NYMEX discovered and brought to a halt the defendant’s 

manipulative scheme. 

Profits 

The complaint alleges that as a result of its manipulative trading scheme, Optiver US 

reaped profits of over $1 million. 

NYMEX energy futures prices are used as benchmarks for energy prices worldwide and 

US futures markets serve a vital price discovery function. When that price discovery 

function is interfered with, as it was here, the Division of Enforcement will act. 

Optiver’s traders considered their manipulative trading scheme, in their words, a “fun 

game” that involved their efforts to “hammer,” “influence,” “push,” “move,” “whack,” and 

“bully” the prices of futures contracts in Crude Oil, Heating Oil, and New York Harbor 

Gasoline. Today’s action lets the marketplace know that the Division of Enforcement 

has a zero-tolerance policy for illegal gamesmanship when it comes to our nation’s 

futures markets. 

Each and every day, Commission staff carefully monitor our commodity markets, and 

we work zealously to ensure the fundamental integrity of the marketplace. The men 

and women of the Division of Enforcement are working tirelessly to pursue every 

investigative lead related to potential wrongdoing in the commodities markets, including 

our nation’s vital energy markets. When we uncover violations of the Commodity 

Exchange Act, as we allege here, we use every resource available to us, to hold 

accountable those responsible, wherever they are located. 

Conclusion 

I would like to thank the Commission for its strong support of our Enforcement efforts in 

this case. 

The NYMEX has done an exemplary job in this case. I would like to thank especially 

Thomas LaSala and his team for their cooperation with Enforcement staff. 

I would also like to thank the National Crude Oil Investigation team and the entire 

Enforcement team who worked on this investigation, including those up here with me 

today.