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 Issues 2015 Report On Enforcement

    Tuesday, November 24, 2015 5:00 pm by and

    On November 19, 2015, the Federal Energy Regulatory Commission (“FERC”) released its annual report on enforcement activities for fiscal year 2015.  The report highlights FERC’s continued focus on incidents involving fraud, market manipulation, and other anticompetitive conduct in the markets subject to its jurisdiction.  It also highlights the types of activities and conduct that have been subject to FERC scrutiny over the past year and provides informal guidance that jurisdictional entities should consider when evaluating their own conduct and compliance programs. (more…)

  2. Monthly Futures Exchange Issuance Report: October 2015

    Friday, November 13, 2015 2:11 pm by , , and

    October’s Highlight

    October saw the first criminal conviction pursuant to Section 4c(a) for spoofing.  A jury concluded that for approximately three months, an individual used a computer algorithm to place orders he did not intend to execute for the purpose of giving the impression that there was significant interest in orders he placed on the other side of the market.  The individual and his trading company had already settled allegations of spoofing with multiple CME Group exchanges (CBOT, CEI, CME, and NYMEX) as well as the CFTC in 2013.  The CFTC settlement required both to pay a $1.4 million civil penalty and disgorge $1.4 million in trading profits, and included a ban from trading on any CFTC-registered entity for one year.  Further, the indivdiual also was ordered to pay the CME exchanges a combined $200,000 fine and $1.3 million in disgorgement, in addition to exchange-specific trading bans. (more…)

  3. 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…)

  4. 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…)

  5. 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…)

  6. BP Initial Decision Adopts FERC Staff’s Positions

    Tuesday, August 18, 2015 1:17 pm by , , and

    Seven years after the Federal Energy Regulatory Commission (“FERC” or the “Commission”) first opened an investigation into the trading practices of BP America Inc. and certain of its affiliates (collectively “BP”), on August, 13, 2015, Administrative Law Judge Carmen Cintron (“ALJ Cintron”) issued her Initial Decision in the case of BP America Inc., finding that “BP engaged in market manipulation” by “intentionally [selling] large volumes of next-day physical gas at HSC in a way designed to benefit their corresponding short financial positions.”[1]  ALJ Cintron agreed with FERC Staff on all the material issues in the case, disagreeing with BP that FERC did not have jurisdiction over the case and finding BP’s defenses unpersuasive. (more…)

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