David Applebaum and Todd Brecher Pen Law360 Article on FERC Pursuit of Individual Trader Liability
Law360 has published the article “FERC’s Continued Pursuit Of Individual Trader Liability,” written by Akin Gump energy regulation, markets and enforcement partner David Applebaum and associate Todd Brecher.
The article discusses an order by FERC approving a settlement between its Office of Enforcement (OE) and National Energy & Trade LP (NET) that resolved the commission’s investigation into NET’s alleged manipulation of natural gas prices through bidweek trading at Tetco M3 and Henry Hub in order to benefit related financial positions. On the same day, Applebaum and Brecher write, FERC also issued an order approving a settlement between OE and an NET trader, based on that individual’s involvement in the Tetco M3 trading at issue.
Both of these settlements, the authors write, “involve similar allegations to those that the OE has made in other enforcement cases involving natural gas trading … reflecting the agency’s continued focus on ‘related-position’ cases.” With this in mind, they suggest that the settlements are notable for several reasons.
First, Applebaum and Brecher write that the NET settlement “reflects a rare instance in which FERC has approved a downward departure from its penalty guidelines, and it appears to be the first such departure in a market manipulation case.” Another reason, they say, “is that these settlements show the persistence with which FERC will pursue even relatively small manipulation cases — even when the case involves a company that no longer exists and the conduct had only limited effects on FERC’s jurisdictional markets.” They also observe that the settlements “reflect that the OE continues to pursue individual traders in enforcement cases, not just companies, and continues to seek to negotiate individual trader bans.”
To read the entire article by Applebaum and Brecher, please click here.