Come By Chance refinery director ordered to pay US$5.25M for 'fraudulent' fuel trades at prior job

A senior official linked to the Come By Chance oil refinery in Newfoundland is facing a multi-million-dollar penalty for "unlawful" energy trades during his tenure at a previous job working as an airline industry executive in the United States.

Last week, the U.S. Commodity Futures Trading Commission (CFTC) issued an order against Jon Ruggles for "engaging in fraudulent, fictitious, and noncompetitive trades in crude oil and heating oil futures and options."

That order requires Ruggles to "disgorge more than $3.5 million in trading profits and pay a $1.75 million penalty for his illegal futures and options trading," according to a press release by the American regulator.

• Read the CFTC press release
• Read the full CFTC order involving Jon Ruggles

According to the CFTC order, Ruggles did not admit or deny any of the findings.

He is not permitted to publicly dispute any of the order's conclusions, and was hit with a permanent trading ban by the commission.

In its press release, the CFTC says Ruggles generated US$3.5 million in "ill-gotten gains" by using "his former employer's trading information to trade for his own personal benefit in personal accounts he controlled."

The CFTC says that happened on at least 71 days during a nine-month period in 2012.

Ruggles misappropriated the employer's trading information for his own benefit and committed futures and options fraud.- CFTCpress release

At the time, Ruggles was a senior executive at Delta Air Lines, in charge ofits fuel hedging strategies.

Delta bought a refinery in Pennsylvania that year, in the hopes of cutting its jet fuel bill.

According to the CFTC, Ruggles used a personal account in his wife's name to make trades on the same commodities he traded at work.

"Ruggles misappropriated the employer's trading information for his own benefit and committed futures and options fraud," the CFTC says in its press release.

The CFTC deals withcivil matters, not criminal.

Current role at Come By Chance unclear

Ruggles left Delta around the end of 2012, according toThe Secret Club That Runs The World, a book about commodity traders.

Documents obtained by CBC News link him to the Come By Chance refinery beginning in2014, when it was bought by a New York merchant bank.

• Come By Chance refinery sold to New York merchant bank

He is listed as "director of refining" in anenvironmental agreement between the Newfoundland and Labrador government and the new owners of Come By Chance.The province helped facilitate the 2014 sale by exempting the new owners fromany pre-existing environmental liabilities at the refinery site.

As recently as this March, Ruggles was identified on the website for Silverpeak Strategic Partners as director of refining at Come By Chance. Silverpeakdescribes itself as the owner of the refinery.

Ruggles is no longer listed on that page. His current status at Come By Chance is unclear.

CBC News emailed Newfoundland-based NARL Refining LP Tuesday to ask about his employment status and the CFTC order.

NARL spokeswoman Gloria Warren-Slade sent a two-word reply: "No comment."

A Silverpeak spokeswoman in New York did not return messagesfrom CBC News. Neither did the Washington-based lawyer who represented Rugglesin the CFTC matter.

According to the CFTC order, Ruggles now lives in Orlando, Fla.