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FERC Approves $10 Million Settlement With Financial Marketer

August 23, 2017

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

FERC approved a Stipulation and Consent Agreement (Agreement) between the Office of Enforcement (Enforcement) and City Power Marketing, LLC (City Power) and K. Stephen Tsingas (together, Defendants) which resolves the Commission’s claims against Defendants for alleged violations of section 222 of the Federal Power Act (FPA) and the Commission’s Anti-Manipulation Rule, 18 C.F.R. § 1c (2017), and of the Commission’s rule requiring truthful communications with (among others) the Commission, 18 C.F.R. § 35.41(b) (2017); and (b) the Commission’s action captioned FERC v. City Power Marketing, LLC, No. 1:15-cv-01428-JDB (D.D.C.) (the Federal Court Lawsuit).

Under the settlement, the Defendants neither admit nor deny the alleged violations and agree that: (a) Tsingas shall make a payment in total of $2,720,000, consisting of $1,300,000 in disgorgement to PJM Interconnection, Inc. (PJM) and a penalty of $1,420,000 to the U.S. Treasury; and (b) City Power shall make a civil penalty payment of $9,000,000 to the U.S. Treasury, in accordance with the terms set forth in the Agreement.

Tsingas further agrees that he, and any person acting on his behalf, will be banned from engaging or participating (whether through consulting, advising, directing, or strategizing), directly or indirectly, in any trading transaction (whether physical or financial or virtual) within the Commission’s jurisdiction for three years from the date the Agreement was signed by Defendants.

In a prior order, which Defendants contested in federal court, FERC had found that Defendants had, "designed and implemented a fraudulent UTC trading scheme to receive excessive amounts of MLSA [Marginal Loss Surplus Allocation] payments," as more fully discussed in our prior story (click here)

In such prior order, the Commission had originally ordered Defendants to disgorge approximately $1.3 million in unjust profits, ordered City Power to pay a civil penalty of $14 million, and ordered Tsingas to pay a civil penalty of $1 million

Docket No. IN15-5-000

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