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Fraud, Market Manipulation to Remain Focus of FERC’s OE in FY2018

FERC's Office of Enforcement (OE) saw an increase in litigation activities in fiscal year (FY) 2017, while also continuing with its ongoing investigative, audit, surveillance and market oversight responsibilities, according to the 2017 Report on Enforcement released Thursday.

OE maintained its focus on fraud and market manipulation, serious violations of mandatory reliability standards, anticompetitive conduct and conduct that threatens the transparency of regulated markets during FY2017, and expects to pursue those same priorities in FY2018, according to the report.

Investigations staff opened 27 investigations and closed 16 pending investigations with no action or through Federal Energy Regulatory Commission-approved settlements during FY2017. Staff negotiated five settlements that resulted in more than $51 million in civil penalties and disgorgement of more than $42 million in unjust profits.

In FY2016, OE sought to recover more than $567 million in civil penalties and $45 million in disgorgement through litigation work.

During FY2017, audits and accounting staff conducted 11 audits of oil pipelines, electric utilities and natural gas companies, resulting in 301 recommendations for corrective action and directing more than $13 million in refunds and recoveries.

Market oversight staff continued its analysis of market fundamentals and enhanced its capabilities for identifying anticompetitive outcomes and anomalies that might indicate an exercise of market power, according to the report. And analytics and surveillance staff provided expertise on about 50 investigations and, through surveillance activities, identified anomalies and potential misconduct that prompted 48 inquiries.

The lack of a quorum at FERC for much of 2017 had "minimal impact" on OE's activities during the year, according to the report.

"While there were a few matters that had to wait for a quorum -- such as settlement agreements that had been reached between OE and certain entities under investigation -- OE’s work during the year was largely unaffected," staff said.

Since 2007, OE staff has negotiated settlements allowing for the recovery of $763 million and total disgorgements of $479 million. 

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