The defendants, who all worked for El Paso Merchant Energy, are accused of one count of false reporting for e-mailing false data during 2000 to Inside FERC's Gas Market Report, a trade publication. That data was then used to create price indexes, which others would use to set prices.

U.S. Attorney Michael Shelby called false data reporting "an epidemic" in the natural gas industry in years past, and indicated other individuals and companies are under investigation. The men, who appeared before a magistrate judge Wednesday, include Christopher Bakkenist, 41; William Ham, 45; Dallas Dean III, 60; and Donald Guilbault, 51.

The four were among a group of as many as 15 former traders who received letters from Shelby's office in August, telling them they were targets of an investigation. They were warned they could face charges of commodity price manipulation, conspiracy and wire fraud, a set of charges identical to those faced by Todd Geiger, a former El Paso trader who entered a guilty plea last year and is cooperating with the investigation.

With the four agreeing to cooperate, pressure is likely to build against the others who received the target letters. A grand jury has met several times regarding index reporting and other issues at El Paso.

The four turned themselves in to the U.S. Marshals' Office downtown Wednesday morning and appeared before Magistrate Judge Stephen Smith in the afternoon. They were not indicted but rather waived their right to appear before a grand jury.

Assistant U.S. Attorney Belinda Beek told the judge that the men agreed to enter guilty pleas but had not yet done so. They are expected to enter into plea agreements where they trade cooperation for the chance of a lighter sentence.

El Paso has not been charged in the case and is cooperating with Shelby's office and other investigators, including the Commodity Futures Trading Commission and the U.S. Postal Inspection Service. El Paso was one of several companies that have paid $215 million in fines to the CFTC for false data reporting.

The false trading data could have moved natural gas prices either up or down, but Shelby said the impact was that consumers weren't paying prices that accurately reflected the true market. He noted that Beek and fellow prosecutor John Lewis are working on a model to determine how much the prices were moved by false data.

The charges don't claim that the men personally received any direct financial benefit from the allegedly false data, but Shelby noted that someone would not attempt to manipulate prices "without a personal or corporate purpose."

A judge last summer determined that the section of the Commodity Exchange Act underlying the charges was overly broad and unconstitutional. In the case against former Dynegy gas trader Michelle Valencia, Judge Nancy Atlas threw out some of the charges but later allowed prosecutors to reinstate narrower charges.

The 5th Circuit Court of Appeals heard arguments Monday on an appeal by prosecutors trying to get the charges fully reinstated, while Valencia's attorney argued for dismissal.

Despite the status of the law underlying the charges, Shelby said he believed his office's interpretation would prevail.