FTC Issues Final Rule On Wholesale Petroleum "Market Manipulation"

Today the Federal Trade Commission issued its long-awaited rule targeting "market manipulation" in wholesale petroleum markets. With high, daily penalties, the rule is likely to cause petroleum suppliers to develop cautious compliance programs that restrict information disclosed to the market. The final rule becomes effective November 4, 2009.

Under the Energy Independence and Security Act of 2007 (EISA) Congress granted the FTC authority to write and enforce regulations to prohibit "any manipulative or deceptive device or contrivance" in connection with wholesale petroleum transactions. Passed in part in response to concerns that manipulation had contributed to energy price volatility and increases in petroleum prices, this legislation sought to restrict various market activities through increased regulation.