On September 21, 2015, FERC Office of Enforcement Staff issued a Notice of Alleged Violations against Total Gas & Power, North America, Inc. (“TGPNA”) and TGPNA’s West Desk traders and supervisors, Therese Nguyen and Aaron Hall. FERC Staff stated that in a nonpublic investigation, the Office of Enforcement Staff made a preliminary determination that TGPNA and its traders and supervisors violated section 4A of the Natural Gas Act and FERC’s Anti-Manipulation Rule.
In the notice, FERC Staff alleged that TGPNA engaged in a scheme to manipulate the price of natural gas in the southwest United States between June 2009 and June 2012. Specifically, FERC Staff claimed that TGPNA made largely uneconomic trades for physical natural gas during bidweek with the intent to move index prices in a way that benefited the company’s related positions. FERC Staff also alleged that TGPNA’s West Desk implemented the bidweek scheme on at least 38 occasions between June 2009 and June 2012. Finally, FERC Staff asserted that Therese Nguyen and Aaron Hall implemented the scheme and directed other traders to implement the scheme. FERC Staff did not specify in the notice which index or market TGPNA influenced.
The Notice of Alleged Violations marks another case in which FERC’s Office of Enforcement has targeted cross-market manipulation, in which a company makes uneconomic trades in the physical markets to benefit larger positions in the financial markets. In one 2013 example, FERC assessed $435 million in civil monetary penalties and $34.9 million in disgorgement against Barclays Bank PLC – as well as $18 million total against four of its traders – for trading physical electricity in the day-ahead market to benefit its swap positions on the Intercontinental Exchange (see May 27, 2015 edition of the WER).
A copy of the Notice of Alleged Violations is available here.