In recent years the Federal Energy Regulatory Commission (FERC or the Commission) has greatly increased its scrutiny of the energy markets. In 2005 Congress amended the Federal Power Act (FPA), specifying that it would be “unlawful for any entity . . . to use or employ, in connection with the purchase or sale of electric energy or the purchase or sale of transmission services subject to the jurisdiction of the Commission, any manipulative device or contrivance . . . .” Section 222, Federal Power Act (2005); 16 U.S.C. § 824v. FERC, pursuant to this statutory authority, crafted its own Anti-Manipulation Rule, 18 C.F.R. § 1c (2006), which essentially tracks the same language included in the statute, as well as the anti-manipulation provision relevant to securities law, Section 10(b) of the Securities Exchange Act. The language of the rule is very broadly written — so to many market participants who come under regulatory scrutiny and to legal observers, “market manipulation” seems to be somewhat of a “we know it when we see it” sort of violation — which can make compliance difficult for even the most well-intentioned market participants. Read more >>
This article originally appeared on the McGuireWoods blog Subject to Inquiry, which provides commentary on white collar, congressional, SEC, energy enforcement and other government inquiries.