CFTC Charges Two Tx. Men With Defrauding Former Employer =09
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10/29/2001 =09
Dow Jones Commodities Service =09
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(Copyright © 2001, Dow Jones & Company, Inc.) =09
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WASHINGTON -(Dow Jones)- The U.S. Commodity Futures Trading Commission ann=
ounced Monday it has filed an administrative action against two Texasmen =
for defrauding their former employer, Coastal Corporation. The CFTC says =
over a five-month period during 1996, Clay Krhovjak, of Bellville, Texas, a=
nd Paul Cochran, of Houston, engaged in a fraudulent trading scheme to allo=
cate profitable trades belonging to Coastal to accounts controlled by other=
unnamed scheme participants. =09
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The two men were assistant vice presidents at Coastal'scommodity futures =
trading desk in Houstonand were responsible for placing energy futures or=
ders for Coastal with floor personnel at the New York Mercantile Exchange, =
the CFTC said. The CFTC said the men conducted their scheme through Refin=
ed Energy, Inc. of Red Bank, New Jersey, which was one of the NYMEX floor o=
perations used by Coastal. "This allocation scheme ensured Cochran, Krhov=
jakand other participants risk-free personal profits," according to the CFT=
C complaint. The CFTC also alleges the two men defrauded Coastal by tradi=
ng ahead of the firm's futures trades, in that they used advance knowledge =
of Coastal trades to obtain profits illegally for themselves and others. =
A public hearing will be held at a later date to determine if the allegatio=
ns are true and if so, what sanctions are appropriate, the CFTC said. Sep=
arately, in September 2001, Krhovjakand Cochran each pleaded guilty to one =
count of conspiracy to commit commodities fraud before the U.S. District Co=
urt for the Southern District of Texas. Sentencing in that case is expected=
in early 2002, the CFTC said. -By Kim Archer, Dow Jones Newswires; 202=
-479-0853; Kim.Archer@dowjones.com =09