Arbythree, Tulsa (4/24/2009 1:56:09 PM)

And it goes on and on and on. When is the trial?

LocalBoy, B.A. (4/24/2009 2:58:40 PM)

When do all the suppliers and employees that never got paid what they were owed get to drag these guys out of their out of their over-sized mansions and start auctioning off the exotic cars?

NOT SOON ENOUGH!

GETAGRIP, (4/24/2009 3:07:18 PM)

If SEM could of held on for 2 more weeks last July when oil dropped they would of had it made.
Word is Goldman Sacks stacked the deck for their failure. I don't understand what would be their motivation.

Mike S, Tulsa (4/24/2009 3:35:59 PM)

"ooh, semgroup is such a wonderful corporate citizen" "ooh, look at the great things semgroup is doing for Tulsa"

Thanks for the black eye Semgroup. Now if you don't mind, why don't you go tarnish some other city's image now?

Cooldaddy, Broken Arrow (4/24/2009 4:39:03 PM)

I don't care what anyone says. My take on SemGroup is that management led to their demise. Crooks.

VoteNo, Tulsa (4/24/2009 5:35:24 PM)

Of course they knew! They had a stealth lay off in November '07 and started tightening controls on spending around that same time. Everyone just kept hoping their Wunderkind would pull off a miracle and make it all right somehow.

The folks that got let go in November '07 had a REALLY tough time getting new jobs. Potential employers didn't believe that they had really been laid off from SemGroup, aka - The Best Company Ever.

It didn't take a four month investigation for anyone that worked there to know that something had gone very wrong.

O&Gtrader, ft. worth (4/24/2009 5:53:16 PM)

GETAGRIP: Are you suggesting it's OK to continue to lose up to $2.4 billion of company money (basically all of it) and allegedly have to sell off parts of it for margin calls just to prove you're smarter than the oil markets? Even Ronan knows to "never run out of money".
That is why CEOs of energy companies should never, ever, ever, ever, ever trade oil futures if they also dictate cash flow instructions. It truly is against the rules. Now you can see why.

I wonder if SGLP was taken private to raise margin call money? I used to trade through PruBache's New York office and they really get into the management of your trading business.

I suspect that SemGroup wasn't in a big trading hole with them. PruBache wouldn't allow it from my point of view. I wouldn't be surprised to learn that TK could have run away from inquisitive, well managed futures brokers and opened other futures accounts when he came under broker scrutiny as the losses mounted.

human1, Tulsa (4/24/2009 9:01:49 PM)

And we have women in prison in Oklahoma for bounced checks under $500.00.

It just seems to pay to be an alledged white collar crook, it's capitism at its best!

I wonder if these people gave compaign funds to Mr. Ritz who pushed for the 10 commandment statue, and if they all went to church together!

justiceawaits, Claremore (4/25/2009 7:50:25 AM)

If he gets in prison what he gave to others, Tommy will be Tammy by the time he/she gets out.

Graychin, Eucha (4/25/2009 9:19:02 AM)

Tom Kivisto has turned out to be the latest in a long string of Tulsa business "geniuses" who turned out to be much less than he appeared to be.

Remember Bill Bartmann?

O&Gtrader, ft. worth (4/25/2009 10:32:21 AM)

First, thanks to the folk at TW for producing and publishing excellent synopses of what happened at SemGroup.

It sounds like the only division head with a sense of financial responsibility was Mr. Spencer in Europe who discovered a mark-to-market trading loss placed on his book of business: "Spencer was not content to leave it unresolved, according to his June 17 communique with Wallace. "I have important legal duties not to recklessly allow the company to trade itself into insolvency."

All the execs at SemGroup had the exact same responsibility.

Also, as an aside, it was sort of stunning to read about Conagra's "trading venture" with SemGroup. Conagra is a very conservative commodities company with a legacy of commodity trading experience. Unless they got their money out of the deal, I imagine Conagra will be looking for a new employee at some point as a result of the SemGroup/Conagra venture.

Incredulous, (4/25/2009 10:39:31 AM)

Where is Drew? Yes Oklahoma petty crimes are punished by harsh sentences but major crimes are not. Is this the good old boy network in place? It would seem that Oklahoma has no laws to be broken by this theft/fraud. What about Glenn Coffee? hasn't he violated the 20 strikes and your out law?

eddieo, Tulsa (4/25/2009 12:01:57 PM)

It just shows the caliber some people are... not much in my book. Live a lie and "die" by the truth. I hope Mr. K realises the impact his lack of judgement and greed had on people in Tulsa and other places. How much is enough? To what ends will someone go to make it? Obviously, it was all about him. If something looks too good to be true... it normally is. I had the same experience working for the Nanci Corporation in the 90s. I was young and dumb... boy, have I grown up and gotten wise in my "old" age!

Arbythree, Tulsa (4/25/2009 1:11:53 PM)

Good point Incredulous.

Graychin, Eucha (4/25/2009 5:38:18 PM)

The Feds are all over this. If Drew Edmondson piled on, you would accuse him of grandstanding.

Beagle, (4/25/2009 9:04:54 PM)

Get-a-grip: What was the motivation of the counter-parties? Just watch these episodes of "The Sopranos" from season 2:"The Happy Wanderer" and "Bust Out." Here's the key - David Scatino = TK, His sporting goods store = assets of SEM, The Executive Card Game = Oil Futures Trading.

O&Gtrader, ft. worth (4/26/2009 10:20:51 AM)

Here's an interesting tidbit: I know an investment banker in Chicago who sells energy commodity derivative hedging structures to producers and end-users of energy commodities. He has made copies of Freeh's pdf report on SemGroup and is sending it to all his clients. He wants his clients to compare what happened "risk-wise" at Semgroup with their own internal risk management procedures. As a result, it is possible that many energy based jobs will be saved somewhere.

black gold, (4/28/2009 10:35:14 PM)

To O&G Trader: There were others at Sem in management roles who were suspicious about the finances. Some had asked for financial reports so they could obtain bonding, forecast next year's budgets, etc. The reports were not forthcoming but the response from the boys at the top was that the reports were on the way. Some very good people who had some clue about what was going on were shown the door in late '07 and early '08. Their replacements probably never got up to speed before the walls closed in.

O&Gtrader, ft. worth (5/1/2009 11:21:27 AM)

black gold: I am sorry I am late responding to your post. Very interesting comment you made. Someone ratted out SemGroup's bad option trade position (the "wrong side" comment in the pdf) to Moody's in 2007 according to the Freeh report. It might have been one of those departed folk. Or, it could have been Blackstone since Blackstone ratted out the optiontrades to RBZ FInancial according to what the TW printed.

I wish I could wager money on one thing: I bet that Foxx or Wallace went to TK at some point and said "Let's get out of the trades and start over.." and I bet the response was, "OK, but YOU are going to make ME take a huge loss....." thus tranferring the "losing money" responsibility to another exec. It is so common to hear that in the energy trading industry. I heard it quoted on a natural gas basis trade back in 2005 or so. The trader was down a couple hundred thousand and at the extent of his approved risk per trade on the basis trade and the risk manager told him to get out of the trade. Trader says, "OK, but you are going to make me take a $200,000 loss..." Like the loss was the risk manager's fault.

Risk manager said, "That's my job. Do it." And it was done. And that company is still in business today with all its employees.