A highly entertaining report from the Commodity Futures Trading Commission, which is taking court action against people who, it says, set up entirely fictitious energy brokerages, which traded on entirely ficititious exchanges, with (the killer line) an entirely fictitious government regulator overseeing them.
Presumably, customers who asked "so, is this brokerage, you know, kosher?" were told "Of course it is! We're regulated by the American Futures and Options Trading Commission!"

Australian and Singaporean regulators are also involved.

The whole list of non-existent brokers and exchanges sounds almost correct...rather like one of those alternate-universe stories that always involve zeppelins or an averted Russian Revolution.

Customers were duped into believing that: (1) New York Options Exchange (NYOEX), International Energy Exchange (INTENX), New York Petroleum Option Exchange (NYPOE) and American Futures and Options Exchange (AFOEX) are futures exchanges; (2) Tahoe Futures (Tahoe), Vitol Capital Management (Vitol), HPR Commodities (HPR) and Metro Financials (Metro) are their respective brokers; and (3) all these entities are located in the United States. ... In addition, Metro, in order to bolster its credibility, directs customers to American Futures and Options Trading Commission (AFOTC)’s website which purports to be the regulatory body that regulates the commodity futures and option markets in the United States when, in fact, AFOTC is a fictitious entity.

In Risk's April issue, I interview Reuben Jeffery, the chairman of the CFTC (which, unlike the AFOTC, actually exists).
Discussing Amaranth, he told me: "We do not second-guess individual firms’ or traders’ decisions or strategies. We’re not in the business of picking winners or losers, but defining the rules of play… If we have evidence of manipulative or abusive behaviour, we will investigate, but there are a lot of smart people who make bad investment decisions and Amaranth fell into that category.”
Read the full interview when it is published in Risk or online at Risk.net - available from next month.