A Not Altogether Unified FERC Finds Maxim Companies and Single Employee Guilty of Market Manipulation; Commissioner Clark Dissents

摘要

On 5/1/15, a majority of the FERC Commissioners, with Commissioner Tony Clark dissenting, found Maxim Power Corp., Maxim Power (USA), Inc., Maxim Power (USA) Holding Co. Inc., Pawtucket Power Holding Co., LLC, Pittsfield Generating Co. LP (also called Altresco) (collectively Maxim or the Maxim companies) and Kyle Mitton, an energy marketing analyst at Maxim, together and separately liable for violating the Commission’s regulations and section 222 of the Federal Power Act (FPA), which prohibit energy market manipulation (IN15-4). The Commission concluded that these parties pursued a scheme to obtain payments for reliability dispatches based on the price of expensive fuel oil when Maxim in fact burned much less costly natural gas. Maxim was also found to have violated rules that in part prohibits a seller, like Maxim, from submitting false or misleading information or omitting information to Commission-approved independent system operators or market monitors unless due diligence is exercised to prevent such an occurrence, through the same conduct. The Commission assessed civil penalties in the following amounts: $5 million against Maxim and $50,000 against Mr. Mitton. No disgorgement is necessary because the independent market monitor uncovered the manipulative scheme and stopped $2.99 million of excess payments to Maxim. Maxim as a corporate entity and Mitton as an individual are each separately liable for violating the Commission’s regulations and FPA.