Ex-analyst sues Freepoint Commodities, alleges pressure to facilitate insider trading
NEW YORK/HOUSTON, May 28 (Reuters) - A former senior analyst at U.S. trading company Freepoint Commodities has sued the company, alleging that top executives pressured employees to facilitate insider trading and retaliated against employees that objected.
The lawsuit, filed in a New York federal court on May 14 by former employee Andrew Martin, claims Freepoint fired Martin in November to stop him from flagging unethical practices on the company's oil team during an FBI visit of its headquarters in December.
The Stamford, Connecticut-based company has denied the allegations and said it dismissed Martin for performance-related reasons.
"We will contest these spurious allegations from an employee dismissed for performance reasons," Freepoint said in a statement.
Freepoint is still in a three-year deferred prosecution agreement with the U.S. Department of Justice (DoJ), which it entered in December 2023 as part of a settlement to resolve charges of bribing Brazilian officials. One of the conditions of that agreement was that Freepoint strengthen its corporate governance.
Martin alleges in the lawsuit that Freepoint's global head of oil, Sarathi Roy, and head of refined products, Shai Barnea, sought to maximize Freepoint's profits by manipulating markets through solicitation of material, non-public information from oil producers and refiners.
The lawsuit also alleges they distributed copyrighted material from subscription-based providers of market intelligence and research without permission.
The events took place both before and after the settlement with the DoJ, according to the lawsuit.
Neither Barnea nor Roy responded to Reuters requests for comment.
The lawsuit alleges that Barnea pushed Martin to leverage personal contacts at Shell's Deer Park Refinery in Texas to gain non-public insider information on a labor strike there in 2015. Martin worked at Shell Trading before he joined Freepoint in 2014.
The suit alleges that Barnea intended to trade on that information and that could have impacted gasoline prices in the U.S. Gulf Coast.
Deer Park did not reply to a request for comment.
The lawsuit alleges that Barnea also pushed Martin to misappropriate oil market analysis models that he had access to in his previous job at Shell Trading.
Other Freepoint staff used data and tools from previous employers, considered trade secrets, as recently as summer 2024, according to the lawsuit.
Shell Trading did not respond to a request for comment.
Martin's lawsuit says he lodged complaints about Roy and Barnea promoting unethical behavior, and raised his concerns directly with Freepoint Chief Executive Dave Messer in August last year.
Messer did not respond to a request for comment.
Freepoint declined to give more details on Martin's performance, or answer questions about his claims.
"It is our policy not to comment on pending litigation," Freepoint said.
Martin said in a statement that he filed the lawsuit after pursuing his concerns with the company.
"My aim is to reach a fair resolution and move on," he told Reuters.
Barnea left Freepoint in recent weeks, according to two sources familiar with the matter. Reuters was unable to ascertain why he left. Freepoint declined to comment on Barnea's departure.
Several other Freepoint traders and analysts have left from multiple locations worldwide in recent months, according to sources familiar with the matter.
Those include Eli Reichner, a fuel analyst who worked at the company's Stamford headquarters.
In Singapore, oil traders Zhang Peng and Joshua Dawe have left, two sources said.
Reichner and Dawe did not respond to Reuters requests for comments. Peng could not be reached for comment.
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