**Release: #4728-02****For Release: December 19, 2002**

**DYNEGY MARKETING & TRADE AND WEST COAST POWER LLC PAY $5 MILLION TO   SETTLE CFTC CHARGES OF ATTEMPTED MANIPULATION AND FALSE REPORTING**

**Energy Companies Settle Claims Under the Commodity Exchange Act That They   Intentionally Reported False Natural Gas Price and Volume Information to   Energy Reporting Firms in an Attempt to Affect Prices of Natural Gas   Contracts**

   WASHINGTON D.C. - The Commodity Futures Trading Commission (CFTC) announced   today the issuance of an administrative    order settling charges of    attempted manipulation and false reporting against energy companies **Dynegy   Marketing & Trade (Dynegy)** and **West Coast Power LLC (West   Coast)** (the Respondents).  

   In commenting on this matter, CFTC Chairman James E. Newsome said:   "This action involved the collaborative efforts of the CFTC, FERC and   the Department of Justice and represents an outstanding example of how   various law enforcement agencies can work together toward the common goal of   ensuring that the nation’s energy markets operate in an efficient and   competitive manner."  

   Commenting further, Chairman Newsome said: "My philosophy has been,   and will continue to be, that the Commission has a responsibility to   investigate alleged wrongdoing in a comprehensive and timely fashion. And,   when violations are found, the Commission will come down hard. Over the   course of the past year, the news has been peppered with admissions,   accusations, and speculation of wrongdoing in the energy markets and, as a   result, I have committed the Commission’s resources to finding and   punishing the wrongdoers. It is my belief that with the filing and   simultaneous settling of this enforcement action, the Commission sends a   clear message to all companies that engaged in similar behavior...a message   that their actions will not be tolerated and that they will be prosecuted   and subjected to the full consequences of the law."   

   The CFTC settlement order finds that from at least January 2000 through June   2002, Respondents reported false natural gas trading information, including   price and volume information, to certain reporting firms. According to the   order, price and volume information is used by the reporting firms in   calculating published surveys or indexes (indexes) of natural gas prices for   various hubs throughout the United States. The order finds that Dynegy   knowingly submitted false information to the reporting firms in an attempt   to skew those indexes for Dynegy’s financial benefit. According to the   order, natural gas futures traders refer to the published indexes for price   discovery and for assessing price risks. The CFTC found that Dynegy’s   false reporting conduct violated the Commodity Exchange Act (CEA).   

   Gregory G. Mocek, Director, CFTC Division of Enforcement, said: "This   action reflects the diligence of our attorneys and investigators. As part of   our aggressive investigation of these companies, we uncovered significant   violations of the Commodity Exchange Act. We will continue to pursue all   other companies that potentially committed the same types of egregious acts.   Since false reporting can have serious repercussions on the futures markets,   we will bring down the hammer on all violators. These respondents and their   counsel did the right thing by cooperating with our staff."

   The order further finds that in an effort to ensure that its reported   information would be used by the reporting firms, Dynegy caused West Coast   to submit information misrepresenting that West Coast was a counterparty to   fictitious trades. In addition, the order finds that Dynegy did not maintain   required records concerning the information which it provided to the   reporting firms or the true source of the information relayed to those   firms, as required by Commission Regulations. As a result of their actions,   Respondents violated the CEA and Commission Regulations.

   The order further finds that Respondents specifically intended to report   false or misleading or knowingly inaccurate market information concerning,   among other things, trade prices and volumes, to manipulate the price of   natural gas in interstate commerce, and that Respondents’ provision of   the false reports and their collusion, which was designed to thwart the   reporting firms’ detection of the false information, were overt acts   that furthered the attempted manipulation. According to the order,   Respondents’ conduct constitutes an attempted manipulation under the   CEA, which, if successful, could have affected prices of NYMEX natural gas   futures contracts.

   The CFTC orders provide for the following sanctions:  

-     require Dynegy and West Coast to cease and desist from further violations    of the Commodity Exchange Act and Regulations;   
-     require Dynegy and West Coast, jointly and severally, to pay a civil    monetary of $5,000,000; and   
-     comply with their undertakings, including an undertaking to cooperate with    the CFTC in this and related matters.   

   In consenting to the entry of the order and the findings in the order, the   Respondents neither admitted nor denied the findings of the order or the   allegations of the complaint. Dynegy has cooperated in the   Commission’s investigation of this matter by, among other things,   conducting an independent internal investigation and providing the results   of that investigation to Commission staff. The Commission has taken that   cooperation into consideration in its decision to accept Respondents’   Offer.  

The following CFTC Division of Enforcement staff are responsible for this case:  Joseph Rosenberg, John Velasquez, David Acevedo, Lenel Hickson, Stephen Obie and Vincent McGonagle.

   To see a copy of the settlement orders, go to the following Internet web   address http://www.cftc.gov/

Media Case Contacts:**Gregory Mocek****Director of CFTC Division Enforcement, Washington, DC****(202) 418-5378**

**Stephen Obie****Regional Counsel, New York Regional Office****CFTC Division of Enforcement**