Message-ID: <23654567.1075852710082.JavaMail.evans@thyme> Date: Mon, 29 Oct 2001 12:37:06 -0800 (PST) From: fzerilli@powermerchants.com To: pmg@enron.com, john.arnold@enron.com Subject: Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: quoted-printable X-From: "Zerilli, Frank" @ENRON X-To: PMG , Arnold, John , 'Lew_G._williams@aep.com' X-cc: X-bcc: X-Folder: \JARNOLD (Non-Privileged)\Arnold, John\Deleted Items X-Origin: Arnold-J X-FileName: JARNOLD (Non-Privileged).pst CFTC Charges Two Tx. Men With Defrauding Former Employer =09 =09 =09 =09 10/29/2001 =09 Dow Jones Commodities Service =09 =09 =09 =09 (Copyright (c) 2001, Dow Jones & Company, Inc.) =09 =09 =09 =09 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 =09 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