U.S. Futures Exchanges Disciplinary Actions Report - June 2016

ICE 2015-058 Misc. Violation of Rule 6.15(a)- Reportable Positions and Daily Reports and Rule 4.01- Duty to Supervise. An entity allegedly failed, on multiple occasions from January 2015–April 2015 and September 2015–October 2015, to report large trader positions. The entity did not have an adequate process or procedure in place to discover these reporting errors. $20,000 penalty and cease and desist. 2015-014 Block Trade; Misc. Violation of Rule 6.08(b)(i)- Order Ticket Requirements, Rule 4.07- Block Trading, Rule 21.04- Power to Compel Testimony and Production of Documents, and Rule 4.01-...

D.C. Circuit Overrules FERC on Partnership Pipeline’s Tax Recovery

In a July 1 decision with major rate implications for FERC-regulated oil and gas pipelines, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit” or the “Court”) sided with shippers in an appeal of a Federal Energy Regulatory Commission (“FERC”) decision regarding the tax allowances that FERC has allowed oil pipelines to include as a component of their cost of service transportation rates. [1] The Court’s decision in United Airlines, et al. v. FERC, et al. strikes at the ability of interstate oil pipelines structured as partnerships to account for income...

District Court Denies Kraft’s Motion to Dismiss Claims of Market Manipulation

On June 27, 2016, a federal judge denied Kraft Foods Group Inc.’s (“Kraft”) motion to dismiss a proposed class action against the company for allegedly manipulating the wheat futures market. [1] Harry Ploss, on behalf of himself and a proposed class (“Plaintiffs”), alleged that Kraft manipulated the wheat futures market with the intent to influence prices by engaging in two primary schemes: 1) the “long wheat futures scheme,” whereby Kraft allegedly maintained an “enormous” long position in wheat futures, never intended to be used to meet its commercial needs, with the improper intent to push...

Watch Your Wallet – Federal Civil Penalties Are Going Up!

Thanks to the U.S. Congress, civil penalties assessed by federal agencies are increasing as of August 1, 2016. The U.S. Environmental Protection Agency (EPA), the Occupational Safety and Health Administration (OSHA), the Pipeline and Hazardous Materials Safety Administration (PHMSA), the Bureau of Safety and Environmental Enforcement (BSEE), and the Bureau of Land Management (BLM) have all announced penalty increases that could impact the upstream, midstream and downstream oil and gas sectors. Section 701 of the “Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015” (the...

Wyoming Federal Judge Sides With States and Industry, Strikes Down BLM Hydraulic Fracturing Rule

On June 21, 2016, the U.S. District Court for the District of Wyoming struck down the U.S. Bureau of Land Management’s (BLM’s) hydraulic fracturing regulations, finding that BLM “lacked Congressional authority to promulgate the regulations.” This decision is a win for industry and states’ rights, setting aside a federal rule that is unnecessarily duplicative, burdensome and beyond the scope of BLM’s statutory authority. This is yet another setback for the Obama Administration’s second term regulatory push, as previous industry challenges have resulted in the stay of other major new regulatory...

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