FERC announced last Thursday it has approved a $4 million settlement agreement between its Office of Market Oversight and Investigations (OMOI) and Coral Energy Resources related to Coral's failure to disclose to the Commission that a trader provided false transaction information to price survey publishers in the 2000-2001 time period (IN05-5).
Coral will make a voluntary contribution of $3.5 million to an organization providing energy assistance for low income customers as part of the settlement. It also will strengthen its existing regulatory compliance system and spend $500,000 on a task force to develop and implement a "best in class" model for regulatory compliance within the company. While denying it violated any law or rule, Coral acknowledged there was inaccurate price reporting by a Coral trader and that it failed to report that fact to FERC during its 2002 investigation (PA02-2). The settlement relates only to Coral's responses to the FERC investigation and does not affect any other docket.
Coral had responded to an initial FERC investigation in 2002, saying it believed all information reported to the trade press accurately reflected the market. Subsequently, an investigation by the Commodity Futures Trading Commission (CFTC) found that Coral's employees "knowingly delivered" false trading information to Natural Gas Intelligence and Inside FERC's Gas Market Report (see NGI, Aug. 2, 2004).
While neither admitting, nor denying the charges, Coral paid a $30 million civil penalty to settle with the CFTC, part of the more than $250 million in civil penalties imposed by that agency against companies for false reporting of energy price data.
With information provided by the CFTC, FERC reopened its own investigation in 2004, concluding it with the settlement announced Thursday.
"This settlement sends an important message to the industry," said Commission Chairman Pat Wood, III. "We expect the companies we regulate to be completely forthright and honest in their dealings with the Commission."
Intelligence Press Inc. All rights reserved. The preceding news report
may not be republished or redistributed, in whole or in part, in any
form, without prior written consent of Intelligence Press, Inc.