A two-day trading binge could result in an indictment by the U.S. attorney general for Reliant Resources. Reliant said it had been contacted late last week by the Department of Justice regarding price-manipulation allegations both for individual traders and for the company. At press time, the U.S. Attorney General?s Office in Northern California had yet to bring any indictments and would not confirm or deny that any are in the offing, according to the office spokesperson Ji-Yon Yi. If indictments are issued, it would be in addition to a $50 million settlement approved by the Federal Energy Regulatory Commission in October 2003. Questions about economic withholding between May and October 2000, among other issues, were resolved in that case (see <i>Circuit<\/i>, Oct. 3, 2003). The Department of Justice appears to be examining two days of trading?June 21 and 22, 2000. The trades are tied to Reliant?s bet that prices would increase for some future buyer for the future energy capacity it owned in 2000. Reliant held what is known as a ?long position? for the third quarter of 2001. But forward prices dropped in 2000. Thus, Reliant traders engaged in activity allegedly aimed at raising the value of the company's forward contracts. FERC noted that the alleged behavior ?reduced the capacity [Reliant] bid into the California Power Exchange for delivery June 21 by approximately 1,000 MW to see if the PX prices would increase and thus also raise forward prices.? Transcripts of trading those days released by FERC include the following: A Reliant operations manager said he or she would cancel some overtime and ended up pulling 2,000 MW off the market. The result was the Coolwater plant being shut down for the week, ?more due to some market manipulation attempts on our part,? said a manager. Another operations manager replied, ?Trying to shorten the supply, uh? That way the price on demand goes up.? After traders saw that the market revalued the long position after withholding, the company had lost on paper $3 million but made back about $5 million. ?That was the coolest strategy ever,? said one trader. Another called it ?exciting that we were gonna play some market power.? A little later, a trader and an operations manager commented to each other, ?That?ll be cool? and ?That was fu-un.? Reliant said in a statement that the actions being investigated ?were not in violation of laws, tariffs or regulations.? The alleged behavior motivated some traders to write a code of conduct for themselves before regulators forced one on them. However, the conduct issue has died down because of a lack of trading, and recent attempts at an internal code of conduct have yet to come to fruition, according to Gary Ackerman, director of the Western Power Trading Forum.