U.S. Senators Express Concern Over Manipulation of Electricity Markets and Request Information Regarding FERC Enforcement

Aug 12, 2013

Reading Time : 2 min

1) What analysis did FERC conduct to evaluate harms to consumers?  Did FERC’s analysis take into account the ripple effect of manipulations and indirect costs to authorities and ratepayers?  If so, please make that analysis available to our offices.  Does the Commission believe that the $125 million in disgorged unjust profits is sufficient to make ratepayers whole?

2) Do you believe it to be the case that JPMorgan granted its trading rights to two independent firms during the six-month suspension period to evade FERC’s penalties? If so, does FERC consider the six-month suspension to have been an effective penalty? And, if it was not an effective penalty, what other penalties could FERC impose to better deter improper conduct?

3) Is the Commission concerned, based on the high and increasing number of recent FERC enforcement actions, about an increase in market manipulation?

4) Does the Commission believe it has the necessary jurisdiction over related financial markets to make certain that energy consumers are protected? Specifically, what is the status of the Memorandum of Understanding required under the Dodd-Frank Wall Street Reform Act to clarify how FERC and the CFTC plan to address information flow and prevent market manipulators from exploiting gaps in regulatory oversight?

5) Will the Commission release the full FERC Enforcement Staff report of JPMorgan’s conduct in this case?

6) Why did the Commission decide to take no action against JPMorgan executives who planned and executed market manipulations or who impeded the Commission’s investigations? Is the Commission concerned that these executives will continue to engage in illicit activities at other institutions?

7) Why was JPMorgan permitted to avoid an admission of guilt in this case? Under what circumstances would FERC determine that requiring an admission of guilt is a precondition for settlement?

In a separate letter submitted on August 2, 2013, Senator John McCain and Senator Carl Levin informed Chairman Wellinghoff of a review by the U.S. Senate Permanent Subcommittee on Investigations on matters relating to the physical commodity interests held by financial holding companies. The Subcommittee requested that FERC provide key documents collected in connection with its investigation of and settlement with JPMorgan and its affiliates. 

The letters were submitted in FERC Docket Nos. IN11-8 and IN13-5 and can be found here: Warren/Markey Letter and McCain/Levin Letter.

Share This Insight

© 2024 Akin Gump Strauss Hauer & Feld LLP. All rights reserved. Attorney advertising. This document is distributed for informational use only; it does not constitute legal advice and should not be used as such. Prior results do not guarantee a similar outcome. Akin is the practicing name of Akin Gump LLP, a New York limited liability partnership authorized and regulated by the Solicitors Regulation Authority under number 267321. A list of the partners is available for inspection at Eighth Floor, Ten Bishops Square, London E1 6EG. For more information about Akin Gump LLP, Akin Gump Strauss Hauer & Feld LLP and other associated entities under which the Akin Gump network operates worldwide, please see our Legal Notices page.