This week’s Enforcement Update covers:
- Judge in Barclays case denies FERC motion to affirm civil penalties;
- CFTC orders civil penalties and trading bans for former Citigroup Global Markets Inc. traders in spoofing case;
- CFTC Acting Chairman Giancarlo appoints James McDonald as Enforcement Director;
- FERC Enforcement and City Power reach settlement agreement; and
- Judge dismisses plaintiffs’ class action complaint against TOTAL.
This week’s enforcement update covers:
- Fifth Circuit schedules oral argument, and FERC and TOTAL file pleadings regarding Appointments Clause;
- Plaintiffs in class action against TOTAL file response related to oral argument;
- CME Group Exchanges expand reach of manipulation and fraud rules;
- FERC and Silkman file joint discovery plan in district court, and court sets scheduling conference; and
- Judge holds motion hearing in FERC district court case against Barclays.
In this enforcement update, we cover:
- GDF SUEZ Energy Marketing settles with FERC for alleged market manipulation;
- Covanta Haverhill settles with FERC regarding ISO-NE generator operations;
- FERC delegates authority to its staff in absence of quorum;
- CFTC orders The Royal Bank of Scotland to pay $85 million for attempted manipulation of ISDAFIX benchmark;
- FERC and ETRACOM file reply briefs regarding scope of review in district court;
- FERC refers pipeline matter to Office of Enforcement for further investigation;
- Judge grants City Power request for discovery in district court proceeding;
- Judge in Silkman proceeding determines that “de novo review” under Federal Power Act means an ordinary civil action; and
- FERC answers TOTAL motion for leave to respond and response in FERC proceeding
In this enforcement update, we cover:
- CFTC’s enforcement division issues new advisories on cooperation;
- FERC and ETRACOM file briefs regarding scope of review in district court;
- FERC revises PJM FTR forfeiture rule and discusses cross-product manipulation;
- Citigroup Global Markets Inc. settles spoofing charges with the CFTC;
- DOJ settles with Duke Energy for violating premerger notification and waiting period requirements; and
- TOTAL files motion for leave to respond and response in FERC proceeding.
Happy New Year! In our first enforcement update of 2017, we cover:
- FERC increases maximum civil penalties for violations for 2017;
- City Power and FERC file joint stipulation requesting referral to mediation; and
- TOTAL files supplemental authority and FERC responds in declaratory judgment action in Fifth Circuit.
On December 6, the Supreme Court unanimously affirmed a Ninth Circuit decision involving the scope of “personal benefit” required to find insider trading under the securities laws. Salman involved an investment banker who provided inside information about pending mergers to his brother, intending that the brother would benefit from the information. The brother traded on the tips and (without his brother’s knowledge) tipped additional friends – including Salman – who also traded. The Court determined the facts of this case fell within the language of the 1983 Dirks decision, which found that a tipper breaches a fiduciary duty by making a gift of confidential information to a “trading relative.” The Court did not agree with Salman’s position that only a clear pecuniary benefit to the tipper should trigger liability.
On December 7, a group of ten administrative law professors filed a brief of amici curiae in the Powhatan/Chen proceeding in the U.S. District Court for the Eastern District of Virginia, which criticizes FERC’s position on what constitutes de novo review under Section 31(d) of the Federal Power Act (FPA). The brief is substantially similar to the brief filed last month on behalf of Barclays in the U.S. District Court for the Eastern District of California, which was denied by Judge Nunley. According to the brief, “Amici have grave concerns about the legal and policy implications of FERC’s apparent view of what constitutes a district court’s ‘de novo review’ of an agency’s civil penalty assessment.” The professors argue that FERC’s position runs counter to the traditional understanding of court enforcement actions for civil penalties and cannot be squared with the FPA’s civil penalty assessment mechanism, which gives a defendant the choice of challenging FERC’s penalty assessment in a full trial-type proceeding before either an administrative law judge or a federal district court.
In our final enforcement update for 2016, we cover:
- TOTAL files reply brief in declaratory judgment action against FERC in Fifth Circuit;
- Trial concludes in the CFTC’s case against DRW and Wilson; and
- Judge holds scheduling conference and orders briefing in ETRACOM proceeding.
This week’s enforcement update covers the following:
- FERC Staff issues notice of alleged violations against GDF SUEZ;
- FERC files motion to affirm civil penalties against ETRACOM; and
- FERC files brief in TOTAL appeal proceeding in Fifth Circuit.
The bench trial in the CFTC’s case against DRW is underway. On November 28, Judge Richard Sullivan denied the motions to strike testimony filed by the CFTC in its market manipulation case against defendants DRW Investments, LLC and Donald R. Wilson pending in the U.S. District Court for the Southern District of New York. In denying the motion, Judge Sullivan noted that the CFTC failed to submit its motion by the November 4 deadline to file motions in limine and failed to request leave to file this motion at the pretrial conference. In addition, on November 29, the CFTC filed its response to the defendants’ motion to exclude portions of a CFTC expert declaration, which Judge Sullivan granted in part. The trial in this proceeding began on December 1. The parties gave opening statements, and the court heard testimony from a number of DRW traders, including Wilson.