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Former analyst claims Freepoint execs sought insider

information

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Freepoint denies allegations, says performance led to

dismissal

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Several traders and analysts recently departed Freepoint,

sources say

By Shariq Khan and Georgina McCartney

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.

DEPARTURES

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.