18 July 2016

TOTAL and individual respondents file answer to FERC order to show cause

On July 12, TOTAL and the two individual respondents filed an answer to FERC’s order to show cause.  According to the filing, neither the show cause order nor the Enforcement Staff report present a single piece of documentary evidence showing that the respondents intended to manipulate any market.  The respondents also argue that Enforcement Staff errs by accepting unfounded, contradictory, and unreliable allegations from two ex-employees of TOTAL, at least one of whom allegedly stole from the company, and both of whom are biased and highly motivated to manufacture their testimony in search of a financial reward of up to $65 million for whistleblowers.  In addition, TOTAL argues that Enforcement Staff performed a superficial analysis of incomplete and unrepresentative trading data.  Finally, TOTAL argues that FERC lacks the authority to make a determination of a violation under the Natural Gas Act, and instead must pursue the action in federal district court.

TOTAL includes an affidavit from Professor Joseph Kalt supporting its answer.  Professor Kalt argues that FERC Enforcement Staff’s claims and conclusions are unsupported.  According to Professor Kalt, Enforcement Staff has failed to provide quantitative evidence or a proper analysis of the relevant data to support its allegations.  Additionally, Professor Kalt argues that Enforcement Staff’s analysis of TOTAL’s allegedly manipulative scheme fails to accurately represent the available data and testimony of the traders.