Energy trader guilty of cheating

Former NYMEX director booked profits for himself before clients. 6 others netted in investigation.

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By Steve Hargreaves, staff writer

NEW YORK ( -- A former director and head of the New York Mercantile Exchange's compliance committee pleaded guilty Tuesday to cheating clients.

Energy trader Steven Karvellas delayed his client's orders so he could place his own trades ahead of them from September 2002 to May 2003, according to the Manhattan District Attorney's office.

During that time, Karvellas also served on the NYMEX board of directors and was chairman of the exchange's Compliance Review Committee.

"They got the fox in the chicken house," said Manhattan District Attorney Robert Morgenthau, whose office conducted the investigation along with trading watchdog, the Commodity Futures Trading Commission (CFTC). "He was the guy who was supposed to stop this."

In exchange for his guilty plea, Karvellas will get five months in jail and five years probation, according to the D.A.'s office. He will also pay $850,000 and lose his licence to trade commodities.

The Manhattan D.A. says six other traders are also involved in engaging in similar schemes on the NYMEX floor. Three have already pleaded guilty and cases are pending for the three others. To top of page

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