Morrison & Foerster has a leading practice in the area of FERC and CFTC enforcement and compliance and FERC Enforcement audits, representing a broad range of participants in the electricity, natural gas and other commodity markets.
The risks of non-compliance for energy companies and individuals increased substantially under the Energy Policy Act of 2005 which explicitly prohibits the manipulation of energy markets, provides for civil penalties up to $1 million per day per violation under the Federal Power Act and the Natural Gas Act, and increases the level of possible criminal penalties. As a result, FERC has significantly increased its enforcement activities against market participants, including financial firms, electricity and natural gas traders, utilities, independent power producers, virtual traders, natural gas companies, pipeline shippers, and demand response providers. FERC has approved enforcement settlements totaling hundreds of millions of dollars and has numerous ongoing investigations, audits, and enforcement actions.
Under Dodd-Frank and the Commodity Exchange Act, the CFTC has enhanced authority to prohibit the manipulation of commodity markets, including energy, and can impose substantial civil penalties (including up to $1 million per violation). Congress also granted the CFTC new authority to prohibit disruptive trading practices such as banging the close and spoofing. The CFTC has actively policed energy markets for over a decade, which remains an enforcement focus post Dodd-Frank.
Morrison & Foerster lawyers regularly represent a wide range of electricity and natural gas market participants and individuals in FERC and CFTC enforcement proceedings and FERC audits, many of which remain non-public and confidential. In addition, we provide FERC and CFTC compliance advice and training to a wide range of market participants. Our resources include lawyers with significant agency enforcement and audit experience, including a former senior CFTC enforcement official, a former FERC Enforcement attorney who also served as chairman of the Energy Bar Association’s Enforcement & Compliance Committee, and a former assistant general counsel at the CFTC, as well as former prosecutors.
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