Judge Drops 3 Counts Against Former Trader

A former Dynegy Inc. trader accused of reporting false energy prices was cleared of some criminal charges by a federal judge, who said prosecutors had relied on a law that was too broad.

U.S. District Judge Nancy Atlas dropped three counts of making a false trade report against Michelle Marie Valencia, a court filing in Houston showed. Valencia, who was accused of lying about natural-gas prices to an industry newsletter during the California energy crisis of 2000 and 2001, still faces wire-fraud charges.

The statute prosecutors used to charge Valencia is “unconstitutionally overbroad because it doesn’t require that a defendant know the information he or she reported was false or misleading,” the judge said.