More brokers resign from Calgary oil firm at centre of lawsuit

Downtown Calgary

At least two more brokers resigned from a prominent Calgary oil brokerage in recent days, adding to the string of walkouts that spooked Canada’s crude market last spring.

NE2 Group, a brokerage that has historically played an important role in setting prices for Canadian crude, lost Houston-based Mikaela Bennett and Madison Brittner since the weekend, according to people familiar with the matter. The departures come after two-thirds of the firm’s brokers resigned around the Easter holiday weekend over allegations that NE2’s president and owner, Timothy Gunn, was physically and verbally abusive to employees. 

The firm is also at the centre of wrongful dismissal lawsuit brought by Marc Bennett, NE2’s former head of North American energy. NE2 counter-sued in June. Paul O’Regan, NE2’s senior vice president of risk and compliance, declined to comment. Gunn didn’t immediately respond to requests for a comment. 

The first round of walkouts had a chilling effect on Canada’s oil market. NE2’s brokers typically handle enough volume to determine the benchmark prices of several Canadian crude grades, with those prices underpinning a key futures contract. 

In the days after the resignations, traders began exiting at least one contract used to hedge heavy crude on concerns that the firm didn’t have the staffing to ensure accurate prices. Since April, open interest on the Western Canadian Select Oil (NE2) Monthly Index Futures has fallen by 73 per cent. 

© 2022 Bloomberg L.P.

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