On October 26, FERC filed an opposition to City Power’s motion for discovery under Rule 56(d) of the Federal Rules of Civil Procedure in the U.S. District Court for the District of Columbia. According to FERC, City Power has failed to provide any persuasive reason for needing discovery. In particular, FERC claims that City Power does not need discovery about the legitimate purposes of virtual trading in PJM, evidence of intent, or City Power’s allegedly untruthful statements about instant messages. According to FERC, City Power already has much of the requested information. Thus, FERC requests that the court deny City Power’s motion for discovery and grant FERC’s motion for summary judgment.
At Platts Nodal Trader on Thursday, October 27, Director Collins gave a presentation about how FERC Enforcement’s Division of Analytics and Surveillance monitors markets. Collins described his staff and explained how they screen trade data. As the accompanying presentation shows, FERC uses masked and unmasked data, as well as the larger trader position reports now shared by CFTC to screen for concerns warranting further inquiry. Collins observed that persistence – the repeated occurrence of trader activities, especially seemingly uneconomic activity – is a key issue for his team of analysts. When their screens are tripped, Collins explained, they use a peer based evaluation decision process on whether to advance their surveillance through direct inquiry to the company or trader responsible for the suspicious trading. After that, DAS management decides whether to refer the matter to Enforcement Division of Investigation (i.e., the prosecutors). On compliance, Collins shared that if DAS can discern patterns or conduct in the data, then company compliance programs surely should as well. Despite a flurry of probing questions, Collins would not detail what they screen for beyond uneconomic and persistent activity. It was clear, however, that DAS is actively monitoring the markets and provides a strong prong for the triad defending against market manipulation (RTOs and their market monitors, whistleblowers, and FERC DAS).