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ARTICLE · 23 JANUARY 2015

CFTC Issues Enforcement Order Regarding "Risk Management" Services and CTA Registration

Reed Smith
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On, January 16, the CFTC ordered Summit Energy Services, Inc. ("Summit Energy") to pay a $140,000 civil penalty to resolve allegations that it violated the Commodity Exchange Act ("CEA") by failing to register as a commodity trading adviser ("CTA") with the CFTC

United StatesFinance and Banking
Thomas Watterson
Thomas Watterson
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You can find a detailed analysis in our client alert on the order, CFTC Penalizes Energy Company for Failing to Register as a CTA. The CFTC order is available here and a CFTC press release about the order is available here.

Summit Energy advised clients with respect to physical natural gas and electricity transactions. However, it also advised clients entering into over the counter natural gas swaps and listed futures as part of a "risk management" program. Moreover, Summit Energy included descriptions of its "risk management services" on its website, which the CFTC considered to be holding itself out publicly as a CTA.

The order included a $140,000 fine, and the Company registered as a CTA in September of 2014.

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