Freepoint Commodities sued by ex-analyst for alleged pressure to facilitate insider trade

Former senior analyst of U.S. trading firm Freepoint Commodities, a former senior analyst has filed a lawsuit against the company. He claims that top executives pressed employees to facilitate insider trades and that they retaliated on employees who objected.

Former employee Andrew Martin filed a lawsuit in New York Federal Court on May 14, claiming that Freepoint terminated Martin in November for failing to flag unethical conduct on the oil team of the company during an FBI inspection in December.

The Stamford-based Connecticut company denied the allegations, and stated that Martin was dismissed for performance-related factors.

Freepoint issued a statement saying, "We will contest the false allegations made by an employee who was fired for poor performance."

Freepoint has a deferred prosecution deal with the U.S. Department of Justice that runs for three years. It was signed in December 2023, as part of an agreement to settle charges of bribing Brazilian government officials. Freepoint was required to strengthen its corporate governance as part of this agreement.

Martin claims in his lawsuit that Freepoint’s global head for oil, Sarathi, and its head for refined products, Shai, Barnea, tried to maximize Freepoint’s profits through the solicitation of non-public, material information from oil producers.

In the lawsuit, it is also alleged that they have distributed without permission copyrighted materials from providers of subscription-based market intelligence and research.

According to the lawsuit, the events occurred both before and following the settlement with DoJ.

Barnea and Roy did not respond to our requests for comment.

In the lawsuit, Barnea is alleged to have pushed Martin into using personal contacts at Shell’s Deer Park Refinery located in Texas in order to obtain non-public information about a strike that occurred there in 2015. Martin was employed by Shell Trading prior to joining Freepoint in 2014.

The lawsuit alleges that Barnea planned to trade this information, which could have affected gasoline prices on the U.S. Gulf Coast.

Deer Park has not responded to a comment request.

According to the lawsuit, Barnea allegedly also forced Martin to steal oil market analysis models from his former job at Shell Trading.

The lawsuit claims that Freepoint employees used tools and data from former employers, which were considered trade secrets as recently as the summer of 2024.

Shell Trading has not responded to a comment request.

Martin claims in his lawsuit that he complained about Roy and Barnea's unethical conduct and expressed his concerns to Freepoint CEO Dave Messer directly in August of last year.

Messer has not responded to a comment request.

Freepoint refused to provide more information on Martin's performance or answer any questions regarding his claims.

Freepoint stated that it was their policy to not comment on any pending lawsuits.

Martin stated in a press release that he had filed the lawsuit following his discussions with the company.

"My goal is to achieve a fair solution and move forward," he said.

DÉPARTURES

Barnea has left Freepoint, according to sources who are familiar with the situation. I was unable determine why he left. Freepoint refused to comment on Barnea’s departure.

Sources familiar with the situation say that several other Freepoint traders have also left multiple locations around the world in recent months.

Eli Reichner was a fuel analyst at the Stamford headquarters of the company.

Two sources confirmed that oil traders Joshua Dawe and Zhang Peng have left Singapore.

Reichner and Dawe have not responded to requests for comment. Peng was not available for comment. Reporting by Shariq KHan in New York; Georgia McCartney, in Houston; Florence Tan, in Singapore. Editing by Simon Webb, and David Gregorio.

(source: Reuters)