As the Commodity Futures Trading Commission’s (“CFTC”) Division of Swap Dealer and Intermediary Oversight recently reminded market participants in a Staff Advisory, entities that meet the definition of a commodity trading advisor (“CTA”) are subject to various regulatory requirements and may be required to register as a CTA with the National Futures Association (“NFA”). The Staff Advisory is an indication that the CFTC is turning to compliance with its regulatory and registration requirements now that the rulemaking process of the Dodd-Frank Act is finishing. Given this transition, as well as the recently expanded scope of the CFTC’s regulatory oversight over CTAs and commodity pool operators (“CPOs”), entities that advise others or are pooled investment vehicles for futures, options, or swaps should consider whether they might be subject to the CFTC’s CTA and CPO regulatory requirements. (more…)
WE KNOW ENERGY®
David Perlman and Kaleb Lockwood
Robert E. Pease, David Perlman and Jennifer Lias
After an investigation of actions in the western electricity markets by Barclays Bank PLC (“Barclays”), Daniel Brin, Scott Connelly, Karen Levine, and Ryan Smith (collectively, the “Traders” and together with Barclays, “Defendants”), the Federal Energy Regulatory Commission (“FERC”) issued an order finding the Defendants in violation of FERC’s anti-manipulation regulations and assessing Barclays a $435 million civil penalty, assessing each Trader an individual civil penalty, and requiring disgorgement of $34.9 million plus interest in unjust profits.[i] In accordance with the Defendants’ election of a trial de novo in federal district court, on October 9, 2013 FERC filed a petition in the United States District Court for the Eastern District of California requesting an order affirming its assessment of penalties.
In response to FERC’s petition, on December 16, 2013, the Defendants filed a motion to dismiss the complaint.[ii] The Defendants moved to dismiss the complaint, as a matter of law, on the grounds that venue is not proper and that FERC has failed to state a claim upon which relief can be granted. (more…)
Robert E. Pease and David Perlman
By order dated July 22, 2013, the Commodity Futures Trading Commission (“CFTC” or “Commission”) settled charges against Panther Energy Trading LLC and its principal Michael Coscia for engaging in the disruptive trading practice known as “spoofing.” The CFTC charged that Panther and Coscia used a computer algorithm that was designed to illegally place and quickly cancel bids and offers in futures contracts. The CFTC ordered Panther and Coscia to pay civil penalties of $1.4 million and to disgorge an additional $1.4 million in illegal profits. Coscia was also given a one year ban on trading in any CFTC regulated markets. This case is significant because it is the first action the CFTC has brought using its new Dodd-Frank disruptive trading authority.
Panther and Coscia used a computer algorithm that was designed to place a small order which was then followed with several large buy orders. The large orders were intended to give the market the impression that there was buy side pressure. The small order would then be executed at the manipulated price and Panther’s algorithm would then immediately cancel the large orders. These transactions occurred in milliseconds. Panther and Coscia profited on the executions of the small orders many times over the time period under review. The order stated that “although Coscia and Panther wanted to give the impression of buy-side interest, they entered the large buy orders with the intent that they be cancelled before these orders were actually executed.” (more…)
Bracewell & Giuliani
On April 23, 2013, Partner Chuck Shoneman will speak on a panel at Law Seminars International telebriefing on the topic of “New Ruling on FERC’s Anti-Manipulation Authority,” discussing the impact of the D.C. Circuit’s recent decision in FERC v. Brian Hunter. Call in from anywhere! 10-11 am Pacific/1-2 pm Eastern.
For more information please click here.
On Friday October 12, the Commodity Futures Trading Commission’s (CFTC) regulations defining the term “swap” took effect, triggering a cascade of new regulatory requirements pursuant to the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) for entities holding swap positions. Between October 10 and October 12, the CFTC’s staff issued a flurry of no-action letters and guidance documents intended to give market participants more time to prepare for the new regulatory requirements, and to give staff more time to iron out various issues and points of confusion that have been raised by market participants, including those involved in energy trading businesses. For energy industry participants who transact in the organized power markets, trade swaps with municipal utilities, or enter into cleared swaps, the relief was welcome if not entirely complete. (more…)
With the 2012 election year upon us, it promises to be an interesting year in energy politics and policy. Here are 12 (really 13 because of some creative headline writing) issues that will keep the sector hopping this year.
1. Keystone Cops – The biggest energy story of the first quarter without a doubt will be the Keystone pipeline. Not only has this issue blossomed into a larger-than-reality political issue, the President has seemingly been boxed into a corner on the issue that will force him to choose between two major constituencies – labor and environmentalists – just after he thought he got the political break he needed to delay the decision, thanks to Nebraska Republicans. Nonetheless, the battle will rage as the decision approaches. Regardless of the final result after 60 days (I’m predicting politics/jobs will win the day), the legal battle will likely begin then (promising a real fight) – of course likely delaying a final decision until after the election anyway. (more…)
Category: Air Quality/Climate Change, CFTC, Courts, DOE, Enforcement, Environmental, FERC, Mergers & Acquisitions, National Energy Law, Natural Gas/LNG, Nuclear, Offshore, Organized Markets, Regional Energy Law, Reliability, Renewable Energy/Cleantech, Shale Development, Transmission