Bracewell & Giuliani

Powered by the attorneys of Bracewell & Giuliani, Energy Legal Blog® is your resource for updates and analysis on national and global energy issues.
  1. FERC Proposes To Expand Classes Of Information Collected From Participants In RTO And ISO Markets

    Tuesday, September 22, 2015 3:13 pm by and

    On September 17, 2015, the Federal Energy Regulatory Commission (“FERC”) issued a notice of proposed rulemaking (“NOPR”) proposing to significantly expand the information that entities would be required to disclose in order to participate in the wholesale markets administered by Regional Transmission Organizations (“RTO”) and Independent System Operators (“ISO”).  Notably, while market participants already are required to disclose certain affiliate relationships to the RTOs and ISOs in which they participate, FERC’s proposal would require market participants to provide additional information regarding a broad array of contractual, employee, and other business relationships.  (more…)

  2. Monthly Futures Exchange Issuance Report: August 2015

    Friday, September 11, 2015 8:38 am by , , and

    August’s Highlight

    This past month, the NYMEX Business Conduct Committee (“Panel”) entered into a settlement with an entity to resolve alleged violations of Exchange Rule 526- Block Trades and two Market Regulation Advisory Notices, RA1326-4 and RA-1327-4, related to pre-hedging of block trades.  The settlement resulted in a fine of $50,000 and disgorgement of $51,315.60 in profits, as well as a $15,000 fine and 5-day suspension against the individual trader involved.

    Specifically, the Panel found that on four different trade dates the trader pre-hedged block trades by “trading on Globex prior to consummating the block trade with the counterparty.”  The hedge was placed after soliciting but before consummating the block trade and locked in a profit.  The trader also failed to timely report two of the block trades. (more…)

  3. BP Initial Decision: The Significance of Change

    Wednesday, August 19, 2015 8:10 am by , , and

    On August 13, 2015, the administrative law judge (“ALJ”) assigned to hear evidence in BP America Inc. et. Al (Docket No. IN13-15) issued an Initial Decision in which she found that BP America Inc., and certain of its affiliates (collectively “BP”) engaged in market manipulation by intentionally trading to influence index prices to benefit a related financial position.  Putting aside the merits of the BP case, the Initial Decision is a good reminder of the kind of circumstantial evidence that regulators might interpret as indicia of manipulation.  The reoccurring theme is CHANGE.  (more…)

  4. CFTC v. Kraft Foods: What is Market Manipulation?

    Thursday, July 16, 2015 9:35 am by , and

    The Commodity Futures Trading Commission (CFTC) is engaged in its first court battle interpreting its new anti-manipulation authority under the Commodity Exchange Act (CEA) as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank):  CFTC v. Kraft Foods Group, Inc. and Mondelēz Global LLC.[1]  The case involves allegations that Kraft Foods manipulated the wheat futures and cash markets in 2011.  While the case is still in its infancy, and additional facts may come to light that clarify the CFTC’s position, the Complaint can be read to suggest that conduct intended to (or maybe even just anticipated to) influence market prices is per se manipulation if the actor benefits from the impact on prices.  As discussed below, this leaves participants in physical commodity markets with important questions to consider. (more…)

  5. Scope of Trial De Novo Debated in Barclays Electricity Manipulation Case

    Wednesday, June 24, 2015 4:34 pm by , and

    After almost eight years since the Federal Energy Regulatory Commission (FERC) commenced its investigation against Barclays Bank PLC (Barclays) and four of its traders, Scott Connelly, Daniel Brin, Karen Levine and Ryan Smith, for allegedly manipulating the California electricity markets, Barclays filed its answer in federal district court. As expected, Barclays denied all of FERC’s substantive allegations and asserted that the District Court should give no merit to FERC’s findings of fact or legal conclusions. FERC, according to Barclays and the individual traders, must prove its case before an independent arbiter and cannot rely on anything that happened at the agency level. FERC is seeking a $435 million civil penalty against Barclays; $15 million against Connelly; and $1 million each from Brin and Levine. (more…)

  6. Federal District Court Denies Barclays Motion to Dismiss FERC Petition Which Alleges Manipulation and Assesses Significant Penalties

    Thursday, May 21, 2015 2:02 pm by , , and

    For the past two years we have been tracking and reporting on an enforcement proceeding brought by the Federal Energy Regulatory Commission (“FERC”) against Barclays Bank PLC (“Barclays”), Daniel Brin, Scott Connelly, Karen Levine, and Ryan Smith (collectively, the “Traders” and together with Barclays, “Defendants”) for alleged manipulative trading in the western electricity markets from November 2006 to December 2008. Yesterday, the United States District Court for the Eastern District of California denied a motion by the Defendants to dismiss the manipulation action. Although the court’s order did not address the merits of the manipulation charge, the court’s order is significant because it is the first judicial ruling on the scope of FERC’s enforcement authority over the physical electricity markets and the court found that FERC can pursue civil penalty actions against individuals as well as companies. (more…)

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