The company’s website states they offer a “broad range of arbitrage activities, which are becoming more and more sophisticated in form.” It seems their “sophistication” has landed them in the middle of probe by the CFTC, the U.S. futures market regulator.

Optiver’s main office is located in Amsterdam, Netherlands. They operated in many different markets, including the Euronext in Amsterdam, Brussels and Paris; Eurex, the German-Swiss Options Exchange; Xetra, the German Stock Exchange; the London Stock Exchange in the UK; LIFFE, the UK Options Exchange; the Australian Stock Exchange and Australian Options Exchange; Virt-X, the Pan-European Stock Exchange; and Amex, the American Stock Exchange, PHLX, CME, CBOT, CBOE, ICE and ISE.

Within these markets they actively engaged in the purchase and sale of equity options and underlying shares in leading companies; equity-index derivatives; baskets of shares: government bonds, cash and derivatives; commodities; foreign exchange in spot and derivative markets; convertible notes; customized products or market request for over-the-counter (OTC) options; sector-index derivatives; derivatives on pan-European indices; and exchange traded funds (ETF).

This announcement is the first case in the agency’s broad probe in to crude oil market manipulation. The probe was launched in December 2007 to delve “into practices surrounding the purchase, transportation, storage, and trading of crude oil and related derivative contracts.” This is the same period of time that oil prices soared to all time highs.

Optiver is under fire for using proprietary trading software called Hammer that was used to rapidly enter orders before market close to run the price up. The practice is known in the business as “banging” or “marking.” The company attempted “bang” oil prices 19 times last year on the New York Mercantile Exchange (NYMEX) and succeeded 5 times.

Christopher Dowson, Optiver’s head trader, Randal Meijer, head of trading and supervisor of the subsidiaries and the company’s chief executive Bastiaan van Kempen have been named as defendants in the case. In a recorded phone call, Dowson said, “Do the pushing as much as you can in the minute before… in the close don’t try and push it too much harder… just try to defend it let’s say… the idea of it is to attract liquidity…so you may have more chance to sort of bully it the minute before.”

Congress is currently deciding on whether or not to give the regulator greater powers to oversee energy markets. In light of this discovery, more oversight should be done to stabilize oil prices before they are completely out of control and being paid for at the expense of Americans and their families.

According to Olivier Jakob, the trend is likely to continue, regardless of fundamental reasons. “Monday and Tuesday crude oil managed to move ahead without the help of the dollar,” he said. “But once we broke above 1.59 euros per dollar and as we move toward 1.60, there’s going to be more buying coming into oil.”

Investors have been putting more money into commodities, and so far have found an above average return, especially as opposed to stock market investing. However, there are warning signs that the price increase in Oil might be slowing. Consumer demand appears to be sluggish, despite the U.S. heading into the driving season.