Targeting Manipulative Trading Of Electricity Contracts

Law360, New York (November 19, 2009, 4:18 PM EST) -- The U.S. Court of Appeals for the Second Circuit recently upheld a civil enforcement action by the U.S. Commodity Futures Trading Commission, which found that a New York Mercantile Exchange broker "knowingly" manipulated settlement prices for electricity future contracts on behalf of Avista Energy Inc. in 1998.

Although the court ultimately lowered the CFTC's penalty by one-third, the court affirmed the CFTC's cease-and-desist order, registration revocation and 20-year trading prohibition.

The allegedly manipulative trading practices presented an issue of first impression for the CFTC under the...
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