Enforcement 
Civil Penalties Orders to Show Cause Proceedings
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| 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 alphabetical order.
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
A
| Subject(s) of Investigation | Sanctions Imposed or Pending | Issues and Orders |
|---|---|---|
| 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.
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B Top of Page
| Subject(s) of Investigation | Sanctions Imposed or Pending | Issues and Orders |
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| 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.
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| BP America Inc., et al., IN15-13-000 |
Penalty in the amount of $20,160,000 against BP America Inc., BP Corporation North America Inc., BP America Production Company, BP Energy Company (BP); disgorgement in the amount of $207,169 against BP. | 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 set the matter for hearing before an ALJ. The ALJ’s Initial Decision, reviewable by the Commission, found that BP violated Section 1c.1 of the Commission’s regulations and Section 4A of the Natural Gas Act, and made factual findings respecting the application of the Commission’s Penalty Guidelines. The Commission issued an order affirming the ALJ’s Initial Decision and ordered BP to pay $20,160,000 in civil penalties and disgorge unjust profits in the amount of $207,169. On September 7, 2016, BP filed a Petition for Review of the Order on Initial Decision and Rehearing with the United States Court of Appeals for the Fifth Circuit. BP also filed a motion for the Commission to stay the payment directives ordered in the Penalty Assessment and the Commission issued an order on September 12, 2016 granting the motion.
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| 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.
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C Top of Page
| Subject(s) of Investigation | Sanctions Imposed or Pending | Issues and Orders |
|---|---|---|
| City Power Marketing, LLC and K. Stephen Tsingas and FERC v. City Power Marketing, LLC and K. Stephen Tsingas, Case No. 1:15-cv-01428-JDB (DDC) | 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. On September 1, 2015, the Commission filed a Petition for an Order Affirming FERC’s Order Assessing Civil Penalties in the U.S. District Court for the District of Columbia. On November 2, 2015, City Power and Tsingas filed a Motion to Dismiss the Petition. On August 10, 2016, the District Court denied the motion to dismiss, holding that the Commission had stated claims both for market manipulation and for violation of 18 C.F.R. 35.41(b). The Court held that the case should proceed as an ordinary civil action, but noted that the case “might be resolved at summary judgment.”
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| Coaltrain Energy, L.P., Peter Jones, Shawn Sheehan, Robert Jones, Jeff Miller, Jack Wells, Docket No. IN16-4-000 and 2:16-cv-732 (S.D. Ohio) | Disgorgement and civil penalties as follows, respectively: $4,121,894 plus interest in disgorgement against Coaltrain, Peter Jones, and Shawn Sheehan, jointly and severally. Coaltrain $26,000,000 (jointly and severally with Peter Jones and Shawn Sheehan); Peter Jones and Shawn Sheehan $5,000,000 each; Robert Jones $1,000,000; and Jeff Miller and Jack Wells $500,000 each in civil penalties. | Following an Order to Show Cause proceeding, the Commission issued an Order Assessing Civil Penalties against Coaltrain Energy, L.P., Peter Jones, Shawn Sheehan, Robert Jones, Jeff Miller, Jack Wells. The order found that Coaltrain, and the named individuals violated section 1c.2 of the Commission’s regulations and section 222 of the Federal Power Act (FPA), by engaging in fraudulent Up To Congestion (UTC) transactions in PJM Interconnection L.L.C.’s energy markets. The Commission declined to find Adam Hughes to have individually violated section 1c.2. The order further found that Coaltrain Energy, L.P. violated 18 C.F.R. § 35.41(b) of the Commission’s rules through false and misleading statements and material omissions relating to the existence of documents responsive to data requests and relating to the trading conduct at issue in the matter. Finally, the order assessed disgorgement and civil penalties as outlined for the violations. Coaltrain and the other named respondents elected the procedures of FPA section 31(d)(3), in which the Commission assesses a penalty and if the disgorgement and civil penalties are not paid within 60 days, the Commission institutes an action in federal district court to affirm the assessment. On July 27, 2016, the Commission filed a Petition for an Order Affirming the Order Assessing Civil Penalties in the U.S. District Court for the Southern District of Ohio.
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| 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 on December 2, 2013, in the United States District Court for the District of Massachusetts to affirm and enforce its Order Assessing Civil Penalty. On April 11, 2016, the United States District Court for the District of Massachusetts denied CES and Silkman’s Motion to Dismiss and transferred the litigation to the United States District Court for the District of Maine.
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D Top of Page
| Subject(s) of Investigation | Sanctions Imposed or Pending | Issues and Orders |
|---|---|---|
| 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.
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E Top of Page
| Subject(s) of Investigation | Sanctions Imposed or Pending | Issues and Orders |
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| 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.
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| ETRACOM LLC and Michael Rosenberg, Docket No. IN16-2-000 and 2:16-CV-01945 | Civil penalties and disgorgement as follows, respectively: $315,072 plus interest against ETRACOM; $2,400,000 civil penalty against ETRACOM; $100,000 civil penalty against Rosenberg. | Following an Order to Show Cause proceeding, the Commission issued an Order Assessing Civil Penalties against ETRACOM and Rosenberg. The order found that ETRACOM and Rosenberg violated section 1c.2 of the Commission’s regulations and section 222 of the Federal Power Act (FPA), by submitting virtual supply transactions at the New Melones intertie (New Melones) at the border of the California Independent System Operator (CAISO) wholesale electric market in order to affect power prices and economically benefit ETRACOM’s Congestion Revenue Rights (CRRs) sourced at that location. ETRACOM and Rosenberg elected the procedures of FPA section 31(d)(3), in which the Commission assesses a penalty and if the disgorgement and civil penalties are not paid within 60 days, the Commission institutes an action in federal district court to affirm the assessment. On August 17, 2016, the Commission filed a Petition for an Order Affirming the Order Assessing Civil Penalties in the U.S. District Court for the Eastern District of California.
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H Top of Page
| Subject(s) of Investigation | Sanctions Imposed or Pending | Issues and Orders |
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| Houlian Chen Powhatan Energy Fund, LLC HEEP Fund, LLC, CU Fund, Inc. and FERC v. Powhatan Energy Fund, LLC, et al., Case No. 3:15-cv-0452 (E.D. Va.) |
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. A Petition for an Order Affirming FERC’s Order Assessing Civil Penalties has been filed by FERC in the U.S. District Court, Eastern District of Virginia, Richmond Division.
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L Top of Page
| Subject(s) of Investigation | Sanctions Imposed or Pending | Issues and Orders |
|---|---|---|
| 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. | During an Order to Show Cause proceeding before the Commission, Lincoln elected the procedures of FPA section 31(d)(3), in which the Commission assessed a penalty and on December 2, 2013, filed a Petition in the United States District Court for the District of Massachusetts to affirm and enforce its Order Assessing Civil Penalty. On April 11, 2016, the United States District Court for the District of Massachusetts denied Lincoln’s Motion to Dismiss and transferred the Litigation to the United States District Court for the District of Maine. On September 28, 2015, Lincoln filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code, in the United States Bankruptcy Court for the District of Maine. On June 1, 2016, the Commission approved a Stipulation and Consent Agreement (Agreement) between the Office of Enforcement (Enforcement) and Lincoln Paper and Tissue, LLC (Lincoln). Pending bankruptcy court approval, the Agreement resolves the investigation into whether Lincoln engaged in fraudulent conduct in its participation in ISO-New England, Inc.’s (ISO-NE) Day-Ahead Load Response Program (DALRP), thereby violating the Commission’s Anti-Manipulation Rule, 18 C.F.R. § 1c.2 and section 222 of the Federal Power Act (FPA), and the subsequent Order Assessing Civil Penalties that resulted from the underlying Order to Show Cause proceeding relating to Enforcement’s investigation. Lincoln neither admits nor denies the allegations. On June 13, 2016, a motion for approval of the settlement was filed in the bankruptcy court. If the bankruptcy court approves the Agreement, the Commission will file a motion to dismiss the civil penalty petition against Lincoln pending in Maine.
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M Top of Page
| Subject(s) of Investigation | Sanctions Imposed or Pending | Issues and Orders |
|---|---|---|
| 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 (D. Mass.) | Disgorgement by Maxim Power Corp. of $4,000,000 to ISO-NE. Civil Penalty by Maxim Power Corp. of $4,000,000. | 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. The Commission filed a Petition for an Order Affirming Order Assessing Civil Penalty in the U.S. District Court for the District of Massachusetts on July 1, 2015. In response the respondents filed a Motion to Dismiss on September 4, 2015. On July 21, 2016, the District of Massachusetts court issued an order denying Maxim’s motion to dismiss, holding that the case should proceed as an ordinary civil case (but with limited discovery) and assigning assigned a magistrate judge to commence pre-trial scheduling. On September 26, 2016, the Commission issued an Order approving a Stipulation and Consent Agreement (Agreement) between the Office of Enforcement (Enforcement) and Maxim Power Corp., Maxim Power (USA), Inc., Maxim Power (USA) Holding Company Inc., Pawtucket Power Holding Company, LLC, and Pittsfield Generating Company, LP (Maxim Respondents), finding that the Agreement resolves on fair and equitable terms Enforcement’s investigation under Part 1b of the Commission’s regulations, 18 C.F.R. Part 1b, into whether the Maxim Respondents violated section 222 of the Federal Power Act (FPA) and the Commission’s Anti-Manipulation Rule, 18 C.F.R. § 1c and the Commission’s rule concerning communications by entities with market-based rate authority. The Agreement also resolves the Commission’s lawsuit captioned FERC v. Maxim Power Corporation et al., No. 3:15-cv-30113-MGM before the U.S. District Court for the District of Massachusetts, upon approval of dismissal by the court. The Commission will file a Notice of Dismissal With Prejudice with the District of Massachusetts within three business days of receiving confirmation of the first payment. The Maxim Respondents neither admit nor deny the alleged violations and agree to pay the disgorgement and civil penalty outlined in the Agreement.
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| 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.
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N Top of Page
| Subject(s) of Investigation | Sanctions Imposed or Pending | Issues and Orders |
|---|---|---|
| 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.
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R Top of Page
| Subject(s) of Investigation | Sanctions Imposed or Pending | Issues and Orders | 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.
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S Top of Page
| Subject(s) of Investigation | Sanctions Imposed or Pending | Issues and Orders |
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| 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.
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T Top of Page
| Subject(s) of Investigation | Sanctions Imposed or Pending | Issues and Orders |
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| Total Gas & Power North America, Inc., Total, S.A., Total Gas & Power, Ltd., Aaron Hall, and Therese Tran f/k/a Nguyen, Docket No. IN12-17-000 | Disgorgement and civil penalties as follows, respectively: $9.18 million in disgorgement against TGPNA, Total, and TGPL, jointly and severally; $213,600,000 civil penalty against TGPNA (jointly and severally with Total and TGPL), $1,000,000 civil penalty against Hall (jointly and severally with TGPNA, Total, and TGPL), and $2,000,000 civil penalty against Tran (jointly and severally with TGPNA, Total, and TGPL). | The Commission issued an Order to Show Cause directing TGPNA, Hall, and Tran to show the Commission why they should not be found to have violated section 4A of the Natural Gas Act and section 1c.1 of the Commission’s regulations, by engaging in a scheme to manipulate the price of natural gas at four locations in the southwest United States between June 2009 and June 2012. The Order to Show Cause further directs Total and TGPL to show cause why they should not be held liable for TGPNA’s, Hall’s and Tran’s conduct and held jointly and severally liable for their disgorgement and civil penalties based on Total’s and TGPL’s significant control and authority over TGPNA’s daily operations. Finally, the Order to Show Cause directs the Respondents to show cause why disgorgement and civil penalties should not be assessed for the violations alleged by Enforcement Staff.
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