FTC Makes New Proposal to Regulate Wholesale Petroleum "Market Manipulation"

Today the Federal Trade Commission published a revised proposed rule to prohibit "market manipulation" in wholesale petroleum markets. Despite numerous FTC investigations into oil markets – which have uncovered no evidence of significant anticompetitive or illegal conduct – prodded by Congress, the FTC will add an overlay of federal "fraud" regulation on the U.S. oil industry. Based on the anti-fraud provisions of securities regulations, the new rule prohibits any person, in connection with a wholesale petroleum transaction, from making (a) knowingly fraudulent statements or actions or (b) intentionally misleading omissions that distort markets. The FTC may impose civil fines of $1 million per day for violations, in addition to any relief available under the FTC Act.