Constellation Energy Commodities Group to Pay $245 Million for Violation of FERC’s Anti-Manipulation Rule

Photo by Bindalfrodo. Some rights reserved.

On March 9th, FERC issued an Order approving the Stipulation and Consent Agreement that resolved an investigation into Constellation Energy Commodities Group’s (CCG) physical and financial electric energy trading activities in and around the New York Independent System Operator’s (NYISO) Control Area and in other RTOs.

Back in January 2008, FERC’s Office of Enforcement received anonymous tips suggesting that CCG “may have manipulated the prices of electric energy,” and later observed through its own surveillance activities that CCG was engaging in virtual trading in the NYISO that was unprofitable. An ensuing investigation found that CCG had violated both the Anti-Manipulation Rule (18 CFR § 1c.2) and the accuracy requirements of FERC regulations (18 CFR § 35.41(b)).

CCG has agreed to pay a civil penalty of $135,000,000 and to disgorge unjust profits of $110,000,000, including interest.

Interestingly enough, according to Van Ness Feldman, on the same afternoon that FERC issued the above order penalizing CCG, the agency also approved a proposed merger between CCG and Exelon Corporation.

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