Reliant Admits Manipulation Of Trade Volumes

Reliant Resources Incorporated has said that it engaged in trades of electricity and natural gas that inflated revenue and served no purpose except to make the company's energy business look bigger. Its shares plunged seventeen percent on the news. Reliant bought and resold energy at the same price and quantity simultaneously in “round-trip” trades that boosted revenue by ten percent over three years, Chief Executive Steve Letbetter said. The Houston based company disclosed the trades on Friday and was forced to cancel a half billion dollar bond offering. “There's no apparent reason for doing these transactions other than to enhance volumes,” Letbetter said on a conference call with investors. He blamed the transactions on “misguided energy traders” and said the company is reviewing its practices. Energy wholesalers such as Reliant and Enron reported soaring revenue in the late 1990s as power and gas markets were deregulated. Enron's bankruptcy last year and allegations of market manipulation in California have led to increased scrutiny of industry finances by investors and regulators. Visit to

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