More BP back in the News

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The U.S. Federal Energy Regulatory Commission (FERC) and the U.S. Commodity Futures Trading Commission (CFTC) are currently investigating several BP entities regarding trading in the next-day natural gas market at Houston Ship Channel during October and November 2008. The FERC’s enforcing body is now mulling whether to pursue charges against BP, which was prosecuted on propane market manipulation charges in 2006. In that event, BP paid around $300 million to settle those charges.

Questions:

  1. What type of disclosure do you think BP should have made in their financial statements regarding the propane market manipulation? What accrual is needed?
  2. In general terms, when should it have been disclosed?
  3. In addition to the $300 million settlement charges, what expenses would you anticipate that BP incurred?

Source:

Reuters Staff. (2011) U.S. Probing BP For Gas Market Manipulation, HuffingtonPost.com, February 2 (Retrievable online at http://www.huffingtonpost.com/2011/02/02/us-probing-bp-for-gas-mar_n_817340.html)