New Year, New Market-Based Rates Regulatory Regime

By Doron EzicksonThomas Millar, and Michael Selig

The new year has brought U.S. electricity markets participants an overhauled regulatory regime for market-based rates under section 205 of the Federal Power Act.  The Federal Energy Regulatory Commission (“FERC” or “Commission”) has adopted the Final Rule on Refinements to Policies and Procedures for Market-Based Rates for Wholesale Sales of Electric Energy, Capacity and Ancillary Services by Public Utilities (“Order 816”). According to its preamble, Order 816 is “another step in the Commission’s efforts to modify, clarify and streamline certain aspects of its market-based rate (“MBR”) program.”  It reflects the FERC’s sharpened focus on market participants’ accumulation of horizontal market power and potential affiliate abuses as it continues to refine its data collection and analysis capabilities, as also emphasized in the FERC’s 2015 Enforcement Report.  read more

Posted in Enforcement and Investigations, FERC, Oil & Gas, Power, Regulation

REMIT Update – Data Reporting and Enforcement Activities

By Doron Ezickson and Adam Topping

As 2016 begins, energy market participants must prepare for the second and final phase of data reporting under the EU Regulation on wholesale energy market integrity and transparency (“REMIT”). Moreover, the EU Agency for the Cooperation of Energy Regulators (“ACER”) and National Regulatory Authorities (“NRAs”) are demonstrating an increasing willingness to use their respective monitoring and enforcement powers under REMIT, and to share data and intelligence with each other. This all leads to an increased compliance burden on market participants.  read more

Posted in Oil & Gas, Power, Regulation, REMIT

SAVE THE DATE: 2016 Spring Energy & Commodities Conference

Cadwalader, Wickersham & Taft LLP will host an in-depth discussion on the evolving regulatory, transactional and business issues facing U.S. and international energy and commodities market participants.

As the industry continues to face sweeping regulatory, credit, and market challenges, many notable industry leaders, distinguished government and self-regulatory organization officials, and Cadwalader attorneys will offer timely insights on pressing issues and trends.

This complimentary half-day program in Cadwalader’s New York office will feature informative presentations and panel discussions followed by a networking reception.

Thursday, April 7, 2015

If you are interested in attending or have any questions, please contact Allison Geggatt at

Posted in CFTC, Commodity Trading, Distressed Energy, Dodd-Frank, Energy Infrastructure, Enforcement and Investigations, ERCOT, Events, FERC, Finance, Mining/Metals, Oil & Gas, PJM, Power, Regulation, Renewables

CFTC / CME Settle Misappropriation Case

On December 2, 2015, the U.S. Commodity Futures Trading Commission (“CFTC” or “Commission”) and the New York Mercantile Exchange (“NYMEX”) simultaneously announced settlements with Arya Motazedi, a gasoline trader, including for claims of insider trading under CFTC Rule 180.1.1 On numerous occasions from approximately September to December of 2013, while trading RBOB Gasoline Physical Futures and CL Light Sweet Crude Oil Futures, Motazedi allegedly engaged in: (1) trading that moved money from his employer’s account to two of his personal accounts;2 and (2) transactions in his personal accounts, ahead of his employer’s account, to the detriment of the employer’s account. The Commission noted that Motazedi caused his employer to lose $216,955.80.  read more

Posted in Cases, CFTC, Commodity Trading, Enforcement and Investigations, Mining/Metals, Oil & Gas, Power, Regulation

2015 FERC Enforcement Report Confirms Increase in Enforcement and Audit Activity as FERC Faces Unprecedented Number of Litigated Enforcement Matters

The Federal Energy Regulatory Commission’s (“FERC”) Office of Enforcement (“Enforcement”) issued its 2015 Report on Enforcement (“Report”) on November 19, 2015.  The Report summarizes FERC’s enforcement efforts during the fiscal year 2015 in Enforcement’s four divisions:  Investigations, Audits and Accounting, Energy Market Oversight, and Analytics and Surveillance.  The Report offers insight into FERC’s public and non-public enforcement activities, which include self-reported violations and investigations that were closed without further action, and audits of jurisdictional companies.  Consistent with the form of its past reports, FERC focused on four major areas:

1.         Fraud and market manipulation;

2.         Serious violations of the Reliability Standards;

3.         Anticompetitive conduct; and

4.         Conduct that threatens the transparency of regulated markets.

It intends to maintain these priorities in 2016.  The Report’s hard numbers verify an increase in FERC enforcement activity this year, and confirm FERC’s continued emphasis on investigations and audits.  read more

Posted in Enforcement and Investigations, FERC, Oil & Gas, Power, Regulation

CFTC Extends No-Action Relief for Swaps Executed as Part of Certain Package Transactions

By Athena EastwoodAndrew GreenbergNeal Kumar and Michael Selig

On October 14, 2015, the Division of Market Oversight (“DMO”) for the U.S. Commodity Futures Trading Commission (“CFTC”) issued an additional extension of no-action relief for swaps executed as part of “package” transactions.  This relief provides additional time for the CFTC to resolve lingering market infrastructure challenges associated with limited execution methods for swaps subject to mandatory trade execution by permitting counterparties to execute package transactions using additional methods of execution through November 15, 2016.  read more

Posted in CFTC, Mining/Metals, Oil & Gas, Power, Regulation

CFTC Unanimously Approves Notice of Proposed Rulemaking on Regulation of Automated Trading

By Athena EastwoodIsabelle CorbettNeal KumarJorge Pesok and Michael Selig

On November 24, 2015, the Commodity Futures Trading Commission (“CFTC” or “Commission”) held an open meeting to propose the regulation of automated trading (“Regulation AT”).  According to the CFTC, the purpose of Regulation AT is to minimize the potential for disruption that may arise from the automation of order origination, transmission, or execution.  Proposed Regulation AT includes transparency measures and pre-trade and other risk controls for clearing member futures commission merchants (“FCMs”), designated contract markets (“DCMs”), and market participants using algorithmic trading systems.  Furthermore, the CFTC is proposing a new registration requirement for persons engaged in proprietary algorithmic trading on a DCM through direct electronic access.  read more

Posted in Cases, CFTC, Mining/Metals, Oil & Gas, Power, Regulation

CFTC Releases Swap Dealer De Minimis Report

By Athena EastwoodAnthony MansfieldSohair AguirreJonathan FlynnAndrew Greenberg and Neal Kumar

When the U.S. Commodity Futures Trading Commission (“CFTC” or the “Commission”) defined the activity that would require an entity to register as a swap dealer, it provided an exception for entities that engage in a volume of dealing activity below a certain threshold (“de minimis threshold”).  Initially, the CFTC established a phase-in period during which the de minimis threshold is set at $8 billion in notional amount of dealing swaps over a rolling twelve-month period ($25 million for swaps with special entities).  If the CFTC does not take further action before the end of the phase-in period, the de minimis threshold automatically drops to $3 billion on December 31, 2017.  read more

Posted in CFTC, Mining/Metals, Oil & Gas, Power, Regulation

Buyer (and its Creditors) Beware: SemCrude District Court Finds That Purchasers Took Oil and Gas Free and Clear of Producers’ Liens

By Ingrid BagbyMark EllenbergChad MillsDaniel Gwen and Michele Maman

Although almost eight years have lapsed since the chapter 11 cases of Tulsa, Oklahoma-based SemCrude L.P. were confirmed, many of the issues at the forefront of those cases are re-emerging in light of the recent uptick in oil and gas-related restructurings.  The SemCrude cases provided useful guidance for oil and gas producers and purchasers to best address the perfection and management of security interests in oil and gas-related collateral.  read more

Posted in Distressed Energy, Energy Infrastructure, Oil & Gas

New DOJ Policy Regarding Individual Accountability for Corporate Wrongdoing

On September 9, 2015, the U.S. Department of Justice announced a new policy regarding individual accountability for corporate misconduct.  The policy, described in a memo authored by Deputy Attorney General Sally Yates, posits that “one of the most effective ways to combat corporate misconduct is by seeking accountability from the individuals who perpetrated the wrongdoing.”  The focus on individuals represents the first formal announcement of a policy shift that Department of Justice (DOJ) officials have hinted at during the past year.  read more

Posted in Commodity Trading, DOJ, Energy Infrastructure, Enforcement and Investigations, Finance, Mining/Metals, Oil & Gas, Power, Regulation, Renewables, Tax