By Staff Writer | iSkyCreations - News & Media (ISC News & Media) Published March 20th, 2024
HOUSTON – In a case that has rattled the commodities trading sector, Matthew Clark, the 56-year-old former president of a Texas-based energy company from Needville, has pled guilty to orchestrating a complex $5.5 million illegal kickback and insider trading scheme involving natural gas futures contracts. Clark's admissions on March 15 shine a spotlight on the dark underbelly of corporate fraud and market manipulation.
U.S. Attorney Alamdar S. Hamdani stressed the importance of maintaining the integrity of Houston's critical natural gas futures market, condemning Clark's exploitation of insider information and kickback schemes for personal gain. This illicit activity not only undermines public trust in the U.S. markets but also damages the fabric of Houston’s economy.
“Matthew Clark made millions trading in natural gas commodities, but unlike most Houston traders, he made his money illegally through the use of kickback schemes involving associates, relatives and his employer’s proprietary insider information,” said U.S. Attorney Alamdar S. Hamdani. “The natural gas futures contract market is an integral part of Houston’s economy, and to preserve the integrity of that system, it is important that commodity traders who buy and sell those contracts not engage in illegal and unfair practices. That’s why my office is committed to holding those accountable, like Clark, who use kickbacks and inside information to enrich themselves at the expense of the public’s trust in the U.S. markets.”
According to federal prosecutors, Clark conspired to direct his employer’s trades towards Classic Energy LLC, a brokerage firm owned by Matthew Webb, 54, of Tiki Island, in exchange for over $5.5 million in kickbacks, camouflaged as commission fees. This high-level collusion represents a significant breach of ethical trading practices and highlights the vulnerabilities in the commodities trading market.
Principal Deputy Assistant Attorney General Nicole M. Argentieri, leader of the Justice Department’s Criminal Division, emphasized the case as a groundbreaking investigation, marking the first criminal convictions for commodities insider trading in the U.S. Argentieri vowed that this case would pave the way for future actions against those who seek to undermine the financial market's integrity for personal benefit.
The scheme saw Clark leveraging nonpublic material information from his employer to engage in prohibited commodities transactions, working with Webb to prearrange trades with specific counterparties, including John Ed James, 54, of Katy, and Peter Miller, 49, of Puerto Rico. These conspirators then divided the profits from their orchestrated trades, further implicating the integrity of the market.
Assistant Director Michael Nordwall of the FBI’s Criminal Investigative Division assured the public of the FBI's commitment to pursuing and penalizing individuals involved in such fraudulent activities, aiming to preserve the sanctity of the nation's financial systems.
Clark now faces a substantial sentence, with a maximum penalty of 20 years in prison for the honest services wire fraud conspiracy count and 10 years for each count of prohibited commodities transaction and insider trading. His sentencing is set for June 24.
This case also involved several other conspirators, with Webb, James, and Miller admitting to their roles in the fraud and awaiting sentencing. Additionally, Marcus Schultz, 44, of Houston, and Lee Tippett, 64, of Jacksonville, Florida, have been convicted in related cases, with Tippett already serving a 33-month prison sentence.
The investigation, led by the FBI, underscores the relentless pursuit of justice in the face of complex financial crimes. Assistant U.S. Attorney Grace Murphy, Assistant Chief Leslie S. Garthwaite, and Trial Attorneys Della Sentilles and David Hamstra of the Criminal Division’s Fraud Section are prosecuting the case, signaling a robust response to corporate fraud and market manipulation.
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