FERC Orders #Gates, #Powhatan to Pay $34.5 Million; Next Stop, Federal Court? RSS Feed

FERC Orders Gates, Powhatan to Pay $34.5 Million; Next Stop, Federal Court?

The Federal Energy Regulatory Commission on Friday ordered Richard and Kevin Gates and their associates to pay $34.5 million in penalties and disgorged profits in their high-profile market manipulation case. But the brothers say they will force FERC to collect in federal court, where a statute of limitations defense could reduce penalties.

“We’re going to fight, and we look forward to meeting them in court,” Kevin Gates said Saturday.

No Loophole
The commission’s order accepts the Office of Enforcement’s findings that the brothers’ Powhatan Energy Fund and trader Houlihan “Alan” Chen violated anti-manipulation rules by making riskless back-to-back up-to-congestion trades to profit on line-loss rebates (IN15-3). FERC Chairman Norman Bay, who oversaw the investigation in his previous role as Enforcement director, did not participate in the order.

“The fact that the PJM tariff does not explicitly prohibit round-trip UTC trades does not create a loophole or otherwise render respondents’ transactions lawful,” the commission wrote. “Respondents’ round-trip UTC transactions were deceptive and manipulative.”

The order seeks $29.8 million in civil penalties and $4.7 million in disgorgement of profits.

If the Gates brothers don’t pay up within 60 days, as they insist they won’t, FERC will have to file a complaint in U.S. District Court to force payment.

Read full article at RTO Insider