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Orders to Show Cause Proceedings


Orders to Show Cause Proceedings and Federal District Court Litigation

This page provides significant orders and federal district court papers related to all matters that have proceeded to Orders to Show Cause. Matters are listed in reverse chronological order based on the date the Order to Show Cause issued.

Subject(s) of Investigation Sanctions Imposed or Pending Issues and Orders
City Power Marketing, LLC and K. Stephen Tsingas. Civil penalties and disgorgement as follows: $1,278,358 in disgorgement jointly and severally against City Power and Tsingas; $14 million civil penalty against City Power; $1 million civil penalty against Tsingas. The Commission issued an Order Assessing Civil Penalties for alleged violation of the Commission’s Anti-Manipulation Rule, 18 C.F.R. § 1c.2, section 222 of the Federal Power Act (FPA), 16 U.S.C. § 824v(a), and 18 C.F.R. § 35.41(b) by engaging in (i) a scheme to collect Marginal Loss Surplus Allocation payments through large volumes of sham Up To Congestion trades in PJM and (ii) false statements under oath to staff designed to conceal important contemporaneous evidence (instant messages) discussing the trades. City Power and Tsingas elected, as part of their response to the Commission’s Order to Show Cause, the procedures of FPA section 31(d)(3), in which the Commission assessed a penalty and instituted an action in federal district court to affirm the assessment.
Houlian Chen
Powhatan Energy Fund, LLC
HEEP Fund, LLC.
CU Fund, Inc.
Proposed civil penalties and disgorgement as follows: Powhatan Energy Fund: Civil Penalty of $16,800,000 and Disgorgement of $3,465,108 in unjust profits; CU Fund: Civil Penalty of $10,080,000 and Disgorgement of $1,080,576 in unjust profits; HEEP Fund: Civil Penalty of $1,920,000 and Disgorgement of $173,100 in unjust profits; Houlian Chen: Civil Penalty of $500,000 for his acts on behalf of Powhatan Energy Fund and HEEP Fund and $500,000 for his acts on behalf of CU Fund. The Commission issued an Order Assessing Civil Penalties finding a violation of the section 222 of the Federal Power Act (FPA), 16 U.S.C. § 824v, and the Commission’s Anti-Manipulation Rule, 18 C.F.R. § 1c.2, by engaging in fraudulent Up To Congestion (UTC) transactions in order to collect Marginal Loss Surplus Allocation (MLSA) payments in PJM Interconnection L.L.C.’s energy markets. Chen and the other named respondents elected the procedures of FPA section 31(d) (3), in which the Commission assessed a penalty and instituted an action in federal district court to affirm the assessment.
Maxim Power Corporation, Maxim Power (USA), Inc., Maxim Power (USA) Holding Company Inc., Pawtucket Power Holding Co., LLC, Pittsfield Generating Company, LP, and Kyle Mitton. and FERC v. Maxim Power Corp., et al., Case No. 3:15-cv-30113-MGM $5 million civil penalty jointly and severally against Maxim Power Corporation and the other named corporate respondents; $50,000 Civil Penalty against Kyle Mitton. The Commission issued an Order Assessing Civil Penalties finding a violation of the Commission’s Anti-Manipulation Rule, 18 C.F.R. § 1c.2, section 222 of the Federal Power Act (FPA), 16 U.S.C. § 824v(a), and 18 C.F.R. § 35.41(b) through a scheme to mislead the ISO-New England market monitor to collect make-whole payments for reliability dispatches based on the price of oil when Maxim’s plant actually burned less expensive gas. Maxim and the other named corporate respondents including Mitton elected the procedures of FPA section 31(d) (3), in which the Commission will assess a penalty and institute an action in federal district court to affirm the assessment. A Petition for an Order Affirming FERC’s Order Assessing Civil Penalties has been filed by FERC in the U.S. Federal District Court, District of Massachusetts.
BP America Inc., et al. Proposed $28,000,000 Civil Penalty and other sanctions including disgorgement of unjust profits pending hearing and consideration by the Commission. Alleged violation of the Commission’s Anti-Manipulation Rule, 18 C.F.R. 1c.1, for sales of natural gas at specific natural gas trading hubs to affect the index price at which related financial instruments settled.  The Commission has set the matter for hearing before an Administrative Law Judge.
Barclays Bank PLC, et al. and FERC v. Barclays Bank PLC et al., Case No. 2:13-cv-02093-TLN-DAD (E.D. Cal.) $435,000,000 Civil Penalty, Barclays; $34,900,000 Disgorgement, Barclays; $15,000,000 Civil Penalty, trader Scott Connelly; $1,000,000 Civil Penalty each, traders Daniel Brin, Karen Levine, and Ryan Smith. The Commission issued an Order Assessing Civil Penalties finding a violation of the Commission’s Anti-Manipulation Rule, 18 C.F.R. 1c.2, for trading electricity in the western United States to affect the index price at which related financial instruments settled.  Barclays and the individual traders elected the procedures of FPA section 31(d) (3), in which the Commission assessed a penalty and instituted an action in federal district court to affirm the assessment.
Deutsche Bank Energy Trading, LLC $1,500,000 Civil Penalty; $172,645 Disgorgement; Compliance Enhancements; Compliance Monitoring. The Commission issued an Order to Show Cause why it should not assess a penalty for violation of the Commission’s Anti-Manipulation Rule, 18 C.F.R. 1c.2, for trading electricity exports in the California ISO market to affect the value of related congestion revenue rights in that market; and violation of 18 C.F.R. § 35.41(b) for submission of false information to the ISO by improperly designating transactions in contravention to the tariff definitions. The Commission subsequently approved a settlement resolving the matter.
Competitive Energy Services, LLC and Richard Silkman and FERC v. Silkman et al., Case No. 1:13-cv-13054 (D. Mass) $7,500,000 Civil Penalty, CES; $166,841.13 Disgorgement, CES; $1,250,000 Civil Penalty, Silkman. The Commission issued an Order Assessing Civil Penalty finding a violation of the Commission’s Anti-Manipulation Rule, 18 C.F.R. 1c.2, for fraudulently inflating baseline energy consumption in the New England ISO market in order to later claim greater energy curtailments, and payments, in the Day-Ahead Load Response Program (demand response). CES and Silkman each elected the procedures of FPA section 31(d) (3), in which the Commission assessed a penalty and instituted an action in federal district court to affirm the assessment.
Lincoln Paper & Tissue, LLC and FERC v. Lincoln Paper & Tissue, LLC, Case No. 1:13-cv-13056-DPW (D. Mass) $5,000,000 Civil Penalty; $379,016.03 Disgorgement. The Commission issued an Order Assessing Civil Penalty finding a violation of the Commission’s Anti-Manipulation Rule, 18 C.F.R. 1c.2, for fraudulently inflating baseline energy consumption in the New England ISO market in order to later claim greater energy curtailments, and payments, in the Day-Ahead Load Response Program (demand response).  Lincoln elected the procedures of FPA section 31(d) (3), in which the Commission assessed a penalty and instituted an action in federal district court to affirm the assessment.
Rumford Paper Company $10,000,000 Civil Penalty; $2,836,419.08 Disgorgement; Compliance Enhancements; Compliance Monitoring. The Commission issued an Order Assessing Civil Penalty finding a violation of the Commission’s Anti-Manipulation Rule, 18 C.F.R. 1c.2, for fraudulently inflating baseline energy consumption in the New England ISO market in order to later claim greater energy curtailments, and payments, in the Day-Ahead Load Response Program (demand response).  The Commission subsequently approved a settlement resolving the matter.
Moussa I. Kourouma d/b/a Quntum Energy LLC $50,000 Civil Penalty, affirmed by the United States Court of Appeals, District of Columbia Circuit. The Commission issued a final order assessing a civil penalty for violation of 18 C.F.R. § 35.41(b) for submission of false information to the Commission in an application for Market Based Rate authority.  Kourouma petitioned pursuant to FPA section 31(d)(2)(B) for review in the U.S. Court of Appeals for the District of Columbia Circuit, which denied the petition.
Seminole Energy Services, LLC, et al. $300,000 Civil Penalty; $271,315 Disgorgement; Compliance Monitoring. The Commission issued an Order to Show Cause why it should not assess a penalty for violation of Commission’s Open Access Transportation requirement prohibiting buy/sell natural gas transactions.  The Commission subsequently approved a settlement resolving the matter.
National Fuel Marketing Company, LLC, et al. $290,000 Civil Penalty; Compliance Monitoring. The Commission issued an Order to Show Cause why it should not assess a penalty for violation of Commission’s Open Access Transportation requirement that natural gas shippers must have title. The Commission subsequently approved a settlement resolving the matter.
Energy Transfer Partners, L.P., et al. $5,000,000 Civil Penalty; $25,000,000 Disgorgement. The Commission issued an Order to Show Cause why it should not assess a penalty for violation of Commission’s former anti-manipulation rule, 18 C.F.R. § 284.403(a) (2005), for sales of natural gas at specific natural gas trading hubs to affect the price at which related financial instruments settled.  The Commission subsequently approved a settlement resolving the matter.
Brian Hunter $30,000,000 Civil Penalty, overturned on jurisdictional grounds by the United States Court of Appeals, District of Columbia Circuit. The Commission issued a final Order Assessing Civil Penalties finding, after adjudication before an ALJ, a violation of the Commission’s Anti-Manipulation Rule, 18 C.F.R. § 1c.1, for trading natural gas futures contracts on the NYMEX to affect the index price at which related financial instruments settled. Hunter petitioned pursuant to NGA section 717r(b) for review in the U.S. Court of Appeals for the District of Columbia Circuit, which granted the petition.
Amaranth Advisors, LLC, et al. $7,500,000 Civil Penalty. The Commission issued an Order to Show Cause why it should not assess a penalty for violation of Commission’s Anti-Manipulation Rule, 18 C.F.R. § 1c.1, for trading natural gas futures contracts on the NYMEX to affect the index price at which related derivative and swap positions settled.  The Commission subsequently approved a settlement resolving the matter.




Updated: July 20, 2015