Who's Jeffrey Sprecher? How Georgia Senator Kelly Loeffler and husband allegedly facilitated gas pricing scandal
As we move into 2021, nearly all eyes are on the January 5 elections in Georgia which will determine which party will control the United States Senate for the first two years of Joe Biden's presidency. Two seats are being contested in the election, with one being Kelly Loeffler, who was appointed to finish Senator Johnny Isakson's term in December 2019. She will be facing Reverend Raphael Warnock, a pastor at the church once helmed by Martin Luther King. Loeffler's career and personal life is now being picked apart less than a week left for the elections. Under scrutiny also is her marriage to Jeffrey Sprecher and an "Enron-like scandal" that the company he founded and where Loeffler worked and may have also been involved in.
Sprecher was born in Madison, Wisconsin, and graduated with a bachelor's degree in chemical engineering from the University of Wisconsin–Madison in 1978 and a Master of Business Administration from Pepperdine University in 1984. He founded Intercontinental Exchange (abbreviated by the company as ICE) after buying the Continental Power Exchange in Atlanta from MidAmerican Energy Holdings Company for $1 plus the assumption of debt. Loeffler and Sprecher first crossed paths when she joined his company, Intercontinental Exchange in 2002 in investor relations. The pair married in 2004. Loeffler continued to work for the company and in 2018, she became the CEO of an ICE subsidiary, Bakkt.
The focus is now on Loeffler's work at ICE in the mid-2000s during a price manipulation scandal. According to a report from Mother Jones, hedge fund company Amaranth Advisors, which collapsed in 2006 after losing in excess of $6 billion in natural gas futures, manipulated prices on the New York Mercantile Exchange (NYMEX) by buying and selling gas holdings at will. The NYMEX, concerned about Amaranth's trading, directed the fund to reduce its natural gas positions.
While Amaranth did so on the NYMEX, the hedge fund simply moved their trades to ICE, which was an unregulated energy exchange thanks to the "Enron loophole." The loophole in the Commodity Futures Modernization Act of 2000 made electronic energy exchanges exempt from the oversight and regulation conducted by the Commodity Futures Trading Commission.
However, Amaranth took it too far and during a sell-off, the firm ended up losing $6 billion and had to shut down. ICE at the time stated that Amaranth's misfortunes would not affect them, stating, "Amaranth‘s business is not individually material to ICE’s revenues." However, while ICE was not affected, others were. Because of Amaranth's unregulated trading, natural gas prices were inflated. A Senate investigation report stated, "Many of these inflated costs were passed on to consumers, including residential users who paid higher home heating bills."
According to the Mother Jones report, during a congressional hearing in 2007, the late Representative John Dingell stated that Amaranth's actions affected the people, stating, "This is not a victimless crime. In the summer of 2006 Amaranth took enormous positions which appear to have inflated the price of natural gas for delivery in the following winter. Businesses, utilities, schools, and hospitals, as well as individual consumers, wound up paying abnormally high rates as a result... As a result, and according to a recent Senate report, speculation of this nature may have added 20 to 25 dollars per barrel to the price of crude in 2006. The Industrial Energy Consumers of America estimates that Amaranth’s speculation alone cost consumers of natural gas as much as $9 billion from April to August of last year.” According to the Municipal Gas Authority of Georgia, 243,000 of its customers had to collectively pay an additional $18 million in the winter of 2006 and 2007 because of Amaranth's trading on ICE.
The Mother Jones report states that ICE profited off of Amaranth's trading, and Loeffler, acting as the spokesperson for ICE at the time, said it was too soon to form any conclusions about the Amaranth implosion. “We think until there is more information, it’s not fair for anyone to guess what Amaranth may have been doing,” she said. “We believe we are only a small piece of the…market and certainly the most transparent piece.”
These remarks were made by the Internet and individual organizations, MEAWW cannot confirm them independently and nor does it support these claims being made on the Internet.