FERC Alters Proposal to Enhance Reporting in Support of Enforcement

At the Federal Energy Regulatory Commission’s (“FERC” or “Commission”) July 21, 2016 meeting, FERC issued a Notice of Proposed Rulemaking (“NOPR”) proposing to establish a new reporting regime that would require market-based rate (“MBR”) sellers and entities only trading virtual products and financial transmission rights in markets operated by Regional Transmission Organizations (“RTO”) and Independent System Operators (“ISO”) (“Virtual/FTR Participants”) to submit detailed ownership, employee, and contractual information to a database maintained by FERC. FERC proposes that its staff would...

Sales Tax Exemption for Manufacturing Held Inapplicable for Oil and Gas Equipment, but Questions Remain

Southwest Royalties, Inc. v. Hegar , No. 14-0743 (Tex. June 17, 2016)(“ Southwest ”), addresses the applicability of a sales tax exemption for property sold for use in manufacturing in the context of oil and gas production. Although the taxpayer, an oil and gas production company, ultimately lost, as it had at the agency, trial court, and appellate court levels, the Court declined to reach a conclusion on several arguments in the case, leaving unresolved questions in the area. By way of background, Texas, like most states, taxes sales of personal property and certain services. Unless a...

U.S. Futures Exchanges Disciplinary Actions Report - June 2016

ICE 2015-058 Misc. Violation of Rule 6.15(a)- Reportable Positions and Daily Reports and Rule 4.01- Duty to Supervise. An entity allegedly failed, on multiple occasions from January 2015–April 2015 and September 2015–October 2015, to report large trader positions. The entity did not have an adequate process or procedure in place to discover these reporting errors. $20,000 penalty and cease and desist. 2015-014 Block Trade; Misc. Violation of Rule 6.08(b)(i)- Order Ticket Requirements, Rule 4.07- Block Trading, Rule 21.04- Power to Compel Testimony and Production of Documents, and Rule 4.01-...

D.C. Circuit Overrules FERC on Partnership Pipeline’s Tax Recovery

In a July 1 decision with major rate implications for FERC-regulated oil and gas pipelines, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit” or the “Court”) sided with shippers in an appeal of a Federal Energy Regulatory Commission (“FERC”) decision regarding the tax allowances that FERC has allowed oil pipelines to include as a component of their cost of service transportation rates. [1] The Court’s decision in United Airlines, et al. v. FERC, et al. strikes at the ability of interstate oil pipelines structured as partnerships to account for income...

District Court Denies Kraft’s Motion to Dismiss Claims of Market Manipulation

On June 27, 2016, a federal judge denied Kraft Foods Group Inc.’s (“Kraft”) motion to dismiss a proposed class action against the company for allegedly manipulating the wheat futures market. [1] Harry Ploss, on behalf of himself and a proposed class (“Plaintiffs”), alleged that Kraft manipulated the wheat futures market with the intent to influence prices by engaging in two primary schemes: 1) the “long wheat futures scheme,” whereby Kraft allegedly maintained an “enormous” long position in wheat futures, never intended to be used to meet its commercial needs, with the improper intent to push...

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