FERC Issues Staff Notice Of Alleged Violations Against Energy Marketer, Trader

FERC yesterday issued two separate Staff Notices Of Alleged Violations alleging violation of the Commission’s Prohibition of Natural Gas Market Manipulation, 18 C.F.R. § 1c.1 (2016).

The Staff Notices Of Alleged Violations were issued against National Energy & Trade, L.P., and separately David Silva

The Staff Notices Of Alleged Violations do not constitute a finding or decision by the Federal Energy Regulatory Commission, and only represent preliminary Staff determinations. Respondents may contest the preliminary Staff determinations

According to FERC's notice, "Staff alleges that National Energy violated 18 C.F.R. § 1c.1 by fraudulently trading physical basis at Texas Eastern M3 (Tetco M3) during the January 2012 bidweek to increase the value of its financial basis position. Specifically, staff alleges that National Energy accomplished this fraud by selling physical basis at Tetco M3 at arbitrarily low prices early in the morning to benefit a large short financial basis position acquired before bidweek, a large part of which it repurchased after making its physical basis sales. Staff also alleges that National Energy violated 18 C.F.R. § 1c.1 by fraudulently trading physical basis at Henry Hub during the April 2014 bidweek to increase the value of its financial exposure. Specifically, staff alleges that National Energy accomplished this fraud by trading physical basis after the close of the NYMEX solely to benefit National Energy’s exposure to the Henry Hub Inside FERC index."

According to FERC's notice, "Staff alleges that Silva violated 18 C.F.R. § 1c.1 by fraudulently trading physical basis at Texas Eastern M3 (Tetco M3) during the January 2012 bidweek to increase the value of his financial basis position. Specifically, staff alleges that Silva accomplished this fraud by selling physical basis at Tetco M3 at arbitrarily low prices early in the morning to benefit a large short financial basis position acquired before bidweek, a large part of which he repurchased after making his physical basis sales."