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

FCA and Ofgem Question Adequacy of Commodity Firms’ Compliance and Market Abuse Controls

By Doron Ezickson and Adam Topping

In the most recent edition of its regular market conduct and transaction reporting-focused ‘Market Watch’ publication, the UK Financial Conduct Authority (“FCA”) provides a review of commodities firms’ compliance and governance structures, with particular regard to market abuse controls.  In addition, Ofgem this week published an open letter to market participants setting out its views on various issues relating to the implementation of the Regulation on Wholesale Energy Market Integrity and Transparency (“REMIT”), including more detail on various types of behaviour that could constitute market manipulation.  read more

Posted in Commodity Trading, Enforcement and Investigations, FCA, Oil & Gas, Power, Regulation, REMIT

Initial Decision Finds that BP Manipulated 2008 Natural Gas Market in Texas

By Doron Ezickson, Paul Pantano, Sohair Aguirre and Mary Treanor

On August 13, 2015, a  Federal Energy Regulatory Commission (“FERC” or “Commission”) Administrative Law Judge (“ALJ”) issued an initial decision in which she found that BP America Inc. et al. (“BP”) manipulated the natural gas market in Texas for over two and a half months in 2008. ALJ Carmen A. Cintron concluded that BP intentionally sold large volumes of next-day, fixed-price physical gas to suppress the physical gas index to benefit BP’s corresponding short financial positions, in violation of Section 4A of the Natural Gas Act and Section 1c.1 of the Commission’s regulations.  read more

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

CFTC Division of Market Oversight Holds Roundtable to Assess the Made Available to Trade Process

By Anthony Mansfield, Paul Pantano, Neal Kumar, Lamiya Rahman and Mary Treanor

On Wednesday, July 15, 2015, the Commodity Futures Trading Commission’s (“CFTC”) Division of Market Oversight (“DMO”) hosted a public roundtable to discuss the process to determine whether a swap must be executed on an exchange.  The roundtable assessed industry experience with the current process under the Commodity Exchange Act (“CEA”) and compared approaches to mandatory exchange trading in other jurisdictions.  read more

Posted in CFTC, Commodity Trading, Enforcement and Investigations, Oil & Gas, Power, Regulation

Supreme Court Rejects EPA Mercury Emissions Rule

By Athena Eastwood and Douglas Fischer

On June 29, 2015, the Supreme Court cast serious doubt upon the future of the Mercury and Air Toxics Standards (“MATS”) by finding that the Environmental Protection Agency (“EPA”) failed to adequately consider the costs of the rule as part of its initial decision to issue the rule under the Clean Air Act (“CAA”).1 MATS is a regulatory regime aimed at reducing emissions of mercury and other pollutants from power plants.  MATS would have imposed caps on coal and oil-fired power plants’ emissions of mercury, toxic metals, and other pollutants.  read more

Posted in Cases, Emissions, Oil & Gas, Power, Regulation, Supreme Court

REMIT: The Road to Enforcement

By Doron Ezickson and Adam Topping

Following a number of recent developments, described below, the rules and regulations enacted under the European Union (EU) Regulation on Wholesale Energy Markets Integrity and Transparency (REMIT) are now close to being fully-implemented.  Market participants must ensure they are now prepared for an increasing number of investigations and enforcement actions.  read more

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

Tariff Compliance Is Not Enough: FERC Imposes Nearly Thirty-Five Million Dollars in Penalties and Disgorgement against Powhatan Energy Fund and Its Trading Associates

By Doron Ezickson, Thomas Millar, and Mary Treanor

On May 29, 2015, the Federal Energy Regulatory Commission (“FERC”) issued an Order against Powhatan Energy Fund, LLC and its trading partners, Dr. Houlihan Chen, HEEP Fund, LLC and CU Fund, Inc. (together, “Powhatan”).  FERC imposed civil monetary penalties of more than $29 million and disgorgement of nearly $5 million against the entities and a $1 million civil penalty against Dr. Chen for fraudulent trading in PJM Interconnection (“PJM”).  read more

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

CFTC Issues Proposed Order to Exempt Certain SPP Transactions from Regulation Under Most Provisions of the CEA and CFTC Rules

By Paul Pantano, Sohair Aguirre and Lamiya Rahman

On May 19, 2015, the Commodity Futures Trading Commission (“CFTC” or “Commission”) issued an order in response to an application from Southwest Power Pool, Inc. (“SPP”) proposing to exempt three categories of SPP transactions (“Covered Transactions”) from all but the anti-fraud and anti-manipulation provisions of the Commodity Exchange Act (“CEA”) and CFTC Regulations, subject to certain conditions (“Proposed Exemption”).  The Proposed Exemption was published in the Federal Register today and comments are due by June 22, 2015.  read more

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

“Such a fact pattern does not a $5 million penalty make.”

By Doron Ezickson, Thomas Millar and Katherine Vorhis

Or so says one dissenting FERC Commissioner in the recent Maxim Power enforcement proceeding. On May 1, 2015, FERC issued an order assessing civil penalties (the “Order”) of $5 million against Maxim Power Corporation and its named subsidiaries (“Maxim”), as well as $50,000 against Maxim Energy Marketing Analyst, Kyle Mitton (together, the “Respondents”), for violating the Commission’s Anti-Manipulation and Market Behavior rules.  The Commission did not order disgorgement of profits because the overpayments at issue in the matter were returned through ISO-NE tariff processes.  Nor did the Commission impose compliance obligations or other penalties.  read more

Posted in FERC, Oil & Gas, Power, Regulation

What Did April Bring?: FERC Extends Out-of-Market Reliability Measures but Wants Market-Based Solutions

By Gregory Lawrence, Thomas Millar and Mary Treanor

The Federal Energy Regulatory Commission (“FERC”) recently published two orders that approved capacity and reliability measures for the Independent System Operator New England Inc. (“ISO-NE”) and the New York Independent System Operator (“NYISO”).  In contrast to its approval of NYISO’s measures as promoting transparent pricing and appropriate market signals for reserves, FERC approved ISO-NE’s out-of-market winter measures but urged that they be modified further to more closely resemble the market and market-based results.  read more

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