OGFJ Exclusive: FERC considers penalties for ‘market manipulation’

Energy and energy futures marketers and traders who have never before been regulated by FERC are receiving ‘informal nonpublic investigation letters’ from the Commission. What’s going on?

Charles J. “Tim” Engel III and Kristen C. Limarzi¹, King & Spalding, Washington, DC

Two years ago, Congress passed the Energy Policy Act of 2005 – making what the Federal Energy Regulatory Commission (FERC) called “the most significant changes in Commission authority since the New Deal’s Federal Power Act of 1935 and the Natural Gas Act of 1938.”² Chief among these changes was the expansion of FERC’s authority to pursue civil penalty actions for so-called “market manipulation” in power and gas markets, as well as certain transmission and transportation service markets.

Recognizing the interplay between financial transactions and energy transactions (both wholesale and retail), FERC now monitors financial markets over which it traditionally has had no jurisdiction to determine whether activities in those markets might affect FERC-jurisdictional transactions, including wholesale electricity sales and natural gas sales.³ The result is that entities that have never dealt with FERC are finding themselves under investigation by the agency and, in some instances, exposed to multi-million dollar penalties. FERC expanded its Office of Enforcement (formerly the Office of Market Oversight and Investigation), in part to enforce its new market manipulation rules, and in the first use of this new authority, FERC is seeking penalties totaling $291 million from hedge fund Amaranth Advisors LLC and two of its former traders.

In this article, we outline the process that FERC is following to investigate and prosecute these new market manipulation cases. We also look at the entities and transactions now subject to FERC’s enforcement regime and the potential penalty exposure.

FERC’s expanded enforcement authority

Before passage of the Energy Policy Act of 2005 (EPAct)⁴, FERC’s enforcement authority extended only to particular regulated entities, such as electric utilities, oil and gas pipelines, and natural gas producers and distributors. Certain financial service companies registered as power marketers with FERC were also subject to the Commission’s jurisdiction. The EPAct expanded FERC’s reach well beyond these regulated entities – granting the Commission authority to prevent manipulation of certain regulated markets, regardless of who is responsible for that manipulation.

The statute makes it unlawful for “any entity” to use a “manipulative or deceptive device or contrivance” “in connection with” the purchase or sale of natural gas or electric energy or the purchase or sale of transportation or transmission services that are subject to FERC jurisdiction.⁵ The statute further provides that the term “manipulative or deceptive device or contrivance” is used “as those terms are used in section 10(b) of the Securities Exchange Act of 1934.”⁶ Consistent with that direction, FERC adopted separate rules governing gas and power markets modeled on the Securities Exchange Commission (SEC) Rule 10b-5:

(a) It shall be unlawful for any entity, directly or indirectly, in connection with the purchase or sale of [natural gas/electricity] or the purchase or sale of [transportation/transmission] services subject to the jurisdiction of the Commission,
1. To use or employ any device, scheme, or artifice to defraud,
2. To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or
3. To engage in any act, practice, or course of business that operates or would operate as a fraud or deceit upon any entity.⁷

FERC has stated that it will exercise its new authority under these regulations consistent with the SEC’s enforcement of Section 10(b), including reading the SEC’s scienter requirement into the regulations.⁸ Thus, an entity may violate FERC’s market manipulation rules if it acts recklessly to deceive or defraud any entity with respect to a jurisdictional transaction.⁹

Any entity can be subject to this new prohibition, regardless of whether it has previously registered with FERC as a power marketer or otherwise been subject to FERC jurisdiction. For example, local distribution companies and municipal utilities that were not previously regulated by FERC but whose activities impact FERC-jurisdictional transactions are subject to this new rule. More controversial targets of the market manipulation authority are financial traders, including hedge funds, whose activities in the financial markets can impact the prices charged in regulated energy markets.

In one of its first uses of this market manipulation enforcement authority, FERC issued an Order to Show Cause and Notice of Proposed Penalties to hedge fund Amaranth Advisors and two of its traders. In that Order, FERC alleged that Amaranth sold an extraordinary amount of natural gas futures contracts in the last 30 minutes before those contracts expired – effectively driving down the settlement price of the contracts.¹⁰

Amaranth held a much larger stake in derivatives whose value increased as a result of these depressed futures prices.¹¹ Because the natural gas futures contract settlement price was used to price a large number of physical natural gas transactions – which are subject to FERC jurisdiction – FERC contends that Amaranth’s activities in the futures market violated FERC’s market manipulation regulations, even though Amaranth never participated in the physical natural gas markets.¹² The same day FERC initiated its enforcement proceeding against Amaranth, it issued a Show Cause Order to pipeline company, Energy Transfer Partners (ETP), alleging that ETP artificially suppressed wholesale natural gas prices at a major trading hub, harming entities that sold natural gas at the artificially reduced prices and harming consumers by masking the price signals that would ordinarily stimulate production.¹³

Both companies were also sued by the Commodity Futures Trading Commission (CFTC) for violations of the Commodity Exchange Act (CEA)¹⁴ arising out of the same conduct. The scope of FERC’s market manipulation rule, however, is arguably broader than applicable CFTC rules, in part because FERC has interpreted the scienter element of market manipulation to require only recklessness and not specific intent to deceive.¹⁵ By contrast, the CFTC must prove specific intent to create (or attempt to create) an artificial price in order to establish commodities manipulation in violation of the CEA.¹⁶

For firms like Amaranth and ETP that are potentially subject to FERC’s new enforcement authority, the exposure is substantial. The EPAct increased the maximum civil penalty to $1 million per day, per violation, in addition to disgorgement of any unjust profits.¹⁷ In the enforcement actions described above, FERC is seeking the statutory maximum, for a total of $232 million in fines and $59 million in disgorgement from Amaranth and two of its traders, and a total of $97.5 million in fines and $69.2 million in disgorgement from ETP and its subsidiaries.

Procedures for a Market Manipulation Enforcement Action

Preliminary vs. Formal Investigations
An initial investigation into alleged market manipulation can be touched off by several different events. FERC’s Division of Energy Market Oversight (DEMO) monitors the electric, natural gas and related energy and financial markets daily for competitiveness, fairness, and efficiency.¹⁸ In the Amaranth case, it was this routine oversight by DEMO that first revealed the irregular trading activity.¹⁹ In the case of ETP, FERC was alerted to suspicious trades by a tip to its enforcement hotline,²⁰ allegedly from a competitor of ETP.

FERC also has authority to conduct routine audits of regulated entities and has recently begun auditing companies with market-based rate authority such as financial service companies.²¹ Although these audits are ostensibly directed at enforcing reporting requirements and approval limits, they may reveal activities that prompt a market manipulation investigation. Finally, an investigation may be initiated internally by the Commission or its enforcement staff, or prompted by a formal complaint by another market participant harmed by manipulation.²²

After learning of a potential violation, FERC can conduct two types of investigations – preliminary and formal. In practice, however, nearly all FERC investigations begin as preliminary – that is, informal, non-public – investigations.²³ The staff’s powers in a preliminary investigation are limited. At this stage it lacks subpoena authority and, therefore, cannot compel a target or third party to provide testimony or documents. Instead the staff relies on informal, voluntary requests for information. Typically, these requests are made by letter to the target itself or to third parties, and often the letter includes both interrogatory-style questions and requests for documents.

These letters also usually include an instruction to preserve all documents that might be relevant to the staff’s inquiry. The demand to preserve documents could thus be far broader in scope than the document request itself. Although it lacks the ability to subpoena witnesses for deposition, FERC staff frequently requests and obtains both informal interviews and formal depositions under oath of witnesses during a preliminary investigation. In addition to this voluntary discovery, the staff relies on its own market observations, publicly available data, data obtained from other government agencies, and any information obtained from regulated entities through required filings.²⁴

In practice, the majority of the discovery conducted by FERC staff happens during the preliminary investigative phase. In its 15-month investigation of Amaranth, FERC staff received from both Amaranth and third parties trade and position data, memoranda, reports, emails, instant messages, and telephone tape recordings, and took sworn testimony from more than 15 witnesses.²⁵ FERC’s investigation into Amaranth remained preliminary until May of 2007, approximately one year after it began, and by then the vast majority of this discovery was already complete.

Although all the discovery conducted during the preliminary stage is voluntary, companies have strong incentives to cooperate with the staff during this phase of the investigation. First, as discussed more fully below, the Commission can convert a preliminary investigation into a formal one at its discretion – thereby granting the investigative staff the subpoena power necessary to enforce any discovery requests. Therefore, resisting reasonable discovery requests may, at least initially, be futile.

There may be another tactical advantage to cooperating with FERC during the preliminary investigation. Upon receiving an informal request for information, counsel can engage FERC staff – learning valuable information about the scope of the investigation and FERC’s concerns. These conversations also present opportunities to narrow the scope of the discovery requests, influence the staff’s thinking about the case, and possibly resolve the issue early. By seeking early resolution of a preliminary investigation, a company may prevent a non-public investigation from becoming public.

The Commission, at its discretion, can convert a preliminary investigation into a formal investigation by issuing an Order of Investigation, outlining the scope of the inquiry and the specific authority of the investigating officers. Under FERC regulations, officers conducting formal investigations have the power to subpoena witnesses, compel testimony and require the productions of documents or other relevant evidence.²⁶

With respect to market manipulation, FERC also has a unique investigative partner in the CFTC. The EPAct specifically directed FERC and the CFTC to enter into a memorandum of understanding (MOU) on information sharing and the coordination of information requests.²⁷ The MOU allows FERC and the CFTC to request trading data from each other and also provides that the agencies will coordinate their information requests to third parties so as to avoid duplication.²⁸ The enforcement actions against Amaranth and ETP are largely a product of this cooperation.²⁹

In its Show Cause Order to Amaranth, FERC alleges that it began requesting data related to Amaranth trades from the CFTC only a week after discovering a potential problem.³⁰ The two agencies coordinated their respective investigations of both Amaranth and ETP and brought nearly simultaneous enforcement actions against the two firms.

Penalty assessment proceeding

Once FERC has conducted its investigation and determined that a civil penalty is warranted, it will issue a Notice of Proposed Penalty and Order to Show Cause. This order sets forth the nature and scope of the alleged violation and the basis for FERC’s proposed penalty assessment. The respondent has 30 days in which to file an answer, admitting or denying the allegations in the order and stating all disputed legal and factual issues.³¹

In electricity-related transactions, the respondent may elect to have an administrative hearing on the alleged violation and proposed penalty. In natural gas-related transactions the Commission has the discretion to set the matter for a “paper hearing” or a hearing before an administrative law judge, or assess a civil penalty. FERC has stated, however, that when it issues civil penalty notices for manipulation of natural gas-related transactions it “intend[s] to provide companies with hearing procedures before an administrative law judge.”³²

Administrative hearings are conducted by an administrative law judge (ALJ) and are subject to the procedures outlined in Part 385 of the Commission’s regulations.³³ Participants in the administrative hearing have fairly extensive discovery rights that largely track the discovery available under the Federal Rules of Civil Procedure. Under the Commission regulations, parties can use depositions, document requests, requests for admissions and interrogatories, and can even apply to the ALJ for the issuance of a subpoena to a nonparty witness for deposition, the production of documents or appearance at the hearing.³⁴

At the administrative hearing itself, all direct testimony is submitted in written form; however, all witnesses must be available for live cross-examination.³⁵ Although the Federal Rules of Evidence do not apply in these administrative hearings, FERC regulations do provide that the ALJ should exclude “irrelevant, immaterial, or unduly repetitious material” or “any other material which the presiding officer determines is not of the kind which would affect reasonable and fair-minded persons in the conduct of their daily affairs.”³⁶

Following the close of evidence the participants have the right to submit written briefs before the ALJ issues an initial decision and, where appropriate, the ALJ may permit oral argument.³⁷ After this briefing and any oral argument, the ALJ issues her initial decision, which includes findings as to whether a violation has occurred and a recommendation on any appropriate penalty.³⁸ The parties may file exceptions to the initial decision, which the Commission will consider before issuing its final decision. The parties then have 30 days in which to request a rehearing – a necessary prerequisite to appealing a Commission decision to the Federal Court of Appeals.³⁹

In electricity-related transactions only, the party subject to a proposed penalty may elect to bypass this administrative hearing and opt instead for immediate penalty assessment. The Commission will then review the Notice of Proposed Penalty and any responses filed and issue an order setting forth the violation and the appropriate penalty.⁴⁰ The advantage of this procedure to the respondent is that it affords an immediate avenue to de novo review by a federal district court.⁴¹ Like the final Commission decision following a hearing, the district court ruling is appealable to the United States Court of Appeals.

The procedure for penalty assessment in natural gas related transactions is similar but differs in two important respects. First, the Commission need not refer the case to a formal administrative hearing, but can instead conduct a “paper hearing” in which the parties make written submissions directly to the Commission; although as noted above, FERC has stated it intends to provide for ALJ hearings in natural gas-related transactions.⁴² Second, parties in a natural gas-related enforcement action cannot elect an immediate penalty assessment and de novo review in federal district court.43

Other avenues to challenge a FERC Enforcement Action

FERC’s authority to go after firms for futures trading is not without controversy and, therefore, it should not be surprising that financial firms subject to FERC’s new authority have opted for a more aggressive response to proposed penalties – challenging the notice before the Commission or in federal court on jurisdictional grounds. Both Amaranth and ETP have sought an expedited rehearing of the Commission’s penalty notice, challenging FERC’s authority.⁴⁴

Amaranth and its trader Brian Hunter, who faces fines of $30 million for his involvement in Amaranth’s alleged market manipulation, have challenged FERC’s jurisdiction to assess civil penalties for futures trading, arguing that the CFTC has exclusive jurisdiction over the futures markets and that FERC is acting outside of its statutory authority.⁴⁵ FERC has responded to these challenges by arguing that while the CFTC has authority over futures markets, FERC’s enforcement action “concerns the manipulation of financial markets only to the extent that such action directly harmed FERC-jurisdictional physical markets.”⁴⁶

Despite the extensive cooperation between the CFTC and FERC during the investigation of Amaranth, the CFTC’s support of FERC’s position in this case has been lukewarm at best. In responding to Amaranth’s motion to stay FERC’s enforcement action, the CFTC reiterated its position that it has exclusive jurisdiction over the futures markets and that the EPAct does not create an exception to that exclusivity.⁴⁷ For its part, ETP is challenging FERC’s authority to assess civil penalties through an administrative process, rather than affording de novo review in a federal district court.⁴⁸

Other responses to a FERC investigation include challenges to the staff’s investigative authority. If a company believes that FERC is abusing its investigative power, it can refuse to respond to a FERC subpoena. Although non-final administrative orders such as subpoenas are not reviewable by a district court, these orders are also not self-executing.⁴⁹ If a party refused to comply, FERC’s only remedy would be to seek enforcement in federal court – thereby affording the subpoena recipient an opportunity to contest the validity of the subpoena.⁵⁰

Willful refusal to comply with a FERC subpoena is punishable as a misdemeanor,⁵¹ but good faith challenges to FERC’s authority are protected.⁵² In practice, challenges to administrative subpoenas are rarely successful as district courts are reluctant to second-guess administrative agencies’ investigative authority.⁵³ Moreover, outright refusal to comply with a FERC subpoena is an aggressive stance to take, and the potential lost good will should be weighed against the benefit of pursuing such a challenge in court.

Penalty calculations

Although FERC has stated that it will not create a schedule of specific penalties, it has provided some insight into the factors it will consider in assessing fines under this new enforcement authority. The first consideration is the seriousness of the offense. In judging the seriousness, FERC has identified several relevant factors, including (1) the nature and extent of the harm caused; (2) whether the violation was reckless, fraudulent or willful; (3) whether this is an isolated incident or part of a history of wrongdoing; (4) whether the offense was committed by or with the knowledge of senior management; and (5) whether senior management resisted or ignored efforts to inquire into the violation.⁵⁴

FERC has also stated that it will consider the effect of potential penalties on the financial viability of the company in determining the appropriate fine.⁵⁵ In Amaranth, FERC cited the serious harm to consumers from market manipulation and the involvement of Amaranth senior management as factors supporting the maximum civil penalty.56 FERC also concluded that Amaranth’s conduct was willful, based in part on traders’ instant messages, obtained by FERC in its investigation, that allegedly show the traders knew their conduct was suspect and would impact the physical gas markets.⁵⁷

FERC will also consider several factors that might mitigate the penalty assessed, including a company’s internal compliance program, self-reporting and cooperation with the investigation.⁵⁸ FERC has made clear, however, that only exemplary conduct in these areas will garner credit in the penalty assessment process. FERC expects cooperation with its investigation and only early, consistent and continuing cooperation that “quickly ends wrongful conduct, determines the facts, and corrects a problem” will mitigate the penalty amount.⁵⁹ For example, FERC found Amaranth’s cooperation, which included voluntary production of documents, data and witnesses for deposition, to be “acceptable (as it should be in all cases) but not exemplary so as to merit consideration in setting the penalty amount.”⁶⁰

The most valuable mitigating factor may be a company’s initiative to self-report a violation. FERC has stated that prompt self-reporting, combined with corrective measures “may result in a significant reduction in the amount of civil penalty or no civil penalty being assessed.”⁶¹ This does not create a formal amnesty program, like that familiar to antitrust practitioners; however, FERC has stated it will consider self-reporting a significant factor in penalty assessment, and the benefit of doing so should be weighed carefully by any entity that discovers a possible violation.

FERC’s civil penalty authority under the EPAct operates alongside its authority to disgorge unjust profits, and FERC has stated numerous times that none of these factors will mitigate an order of disgorgement.

Conclusion

FERC’s new market manipulation regulations greatly expand the Commission’s enforcement authority and may subject previously unregulated entities to FERC jurisdiction. As the Amaranth and ETP cases show, the potential penalties are also extremely steep. Therefore, although understanding the complex administrative procedure that FERC is using to investigate and assess penalties for alleged market manipulation may be difficult, financial service companies and others whose activities may impact the power and gas markets will benefit from understanding the procedure now – before receiving a document request from FERC.

About the authors

Tim Engel is a partner in King & Spalding’s Energy and Litigation & Antitrust Practice Groups in Washington, DC. His focus is on energy regulatory matters, antitrust, and complex commercial litigation. Engel has a BA in economics from Georgetown University and a JD, magna cum laude, Order of the Coif, from Syracuse University.

Kristen Limarzi is a member of the Business Litigation and Antitrust Practice Groups in the Washington, DC office of King & Spalding. Her practice encompasses mergers and acquisitions, antitrust counseling, and litigation in trial and appellate courts. Limarzi holds a BA with high honors from Swarthmore College and a JD from Georgetown University Law Center, where she graduated magna cum laude, Order of the Coif.

References

1. The authors wish to thank Andrea C. Clarke for her assistance. The views expressed herein are solely those of the authors and not those of King & Spalding or its clients.
2. Fact Sheet, Federal Energy Regulatory Commission, Energy Policy Act of 2005 (Aug. 8, 2006) (available at http://www.ferc.gov/legal/fed-sta/epact-fact-sheet.pdf).
3. So-called “first sales” of natural gas from the wellhead are exempted from FERC jurisdiction. Activities related to hydropower would also be covered by the new market manipulation rules to the extent they involve or impact electricity transactions under FERC jurisdiction.
4. Energy Policy Act of 2005, Pub. L. No. 109-58
5. See 15 U.S.C. § 717c-1; 16 U.S.C. § 824v(a) (2007).
6. Id.
7. 18 C.F.R. §§ 1c.1, 1c.2 (2007).
8. Order No. 670, Prohibition of Energy Market Manipulation, 114 FERC ¶ 61,047 (2006) (hereinafter “Order 670) at ¶¶ 30, 48-49.
9. Id. at ¶ 53.
10. Order to Show Cause and Notice of Proposed Penalties, 120 FERC ¶ 61,085 (July 26, 2007) at ¶ 5 (hereinafter “Amaranth Show Cause Order).
11. Id.
12. Id. at ¶ 6.
13. Order to Show Cause and Notice of Proposed Penalties, 120 FERC ¶ 61,086 (July 26, 2007) at ¶¶ 4-15 (hereinafter “ETP Show Cause Order).
14. 7 U.S.C. § 1, et seq. (2007).
15. Order 670 at ¶ 53.

16. See, e.g., Transnor Ltd. v. BP N. Am. Petroleum, 738 F. Supp. 1472, 1493 (S.D.N.Y. 1990).
17. See 15 U.S.C. § 717t-1(a); 16 U.S.C. § 825o-1(b).
18. See FERC Office of Enforcement: Division of Energy Market Oversight, http://www.ferc.gov/about/offices/oe/oe-doemo-asp.
19. >Amaranth Show Cause Order at ¶ 52.
20. ETP Show Cause Order at ¶ 4.
21. See Catherine Krupka, Athena Velie, There’s a New Sheriff in Town: Energy Derivatives and Ferc, Futures Industry, July/August 2007 at 20.
22. See, e.g., Order of Investigation, DC Energy, LLC v. H.Q. Energy Serv. (U.S.) Inc., Docket No. EL07-67-000, 120 FERC ¶ 61, 281 (Sept. 26, 2007) (initiating formal non-public investigation into alleged market manipulation of the New York wholesale power market).
23. Letter from FERC Chairman Joseph T. Kelliher to Sen. Jeff Bingaman, Chairman, Committee on Energy and Natural Resources, U.S. Senate (Feb. 21, 2007) (available at http://ferc.gov/legal/ceii-foia/foia/freq-req/04-16-07.pdf).
24. See, e.g., 15 U.S.C. § 717g(b) (granting the Commissions authority to inspect all accounts, records, and memoranda of natural-gas companies).
25. >Amaranth Show Cause Order at ¶ 53.
26. 18 C.F.R. § 1b.13.
27. 15 U.S.C. § 717t-2(c)(1); 16 U.S.C. § 824t(c)(1).
28. Memorandum of Understanding Between the Federal Energy Regulatory Commissions (FERC) and the Commodity Futures Trading Commission (CFTC) Regarding Information Sharing and Treatment of Proprietary Trading and Other Information (Oct. 12, 2005) (available at http://ferc.gov/legal/maj-ord-reg/mou/mou-33.pdf).
29. Chairman Joseph T. Kelliher’s Statement on Market Manipulation Show Cause Orders (July 26, 2007) (available at http://www.ferc.gov/news/statements-speeches/kelliher/2007/07-26-07-kelliher.asp).
30. Amaranth Show Cause Order at ¶ 53.

31. 18 C.F.R. § 385.213.
32. Policy Statement on Enforcement, 113 FERC ¶ 61,068 (Oct. 20, 2005) at 8 (hereinafter “Policy Statement).
33. Statement of Administrative Policy Regarding the Process for Assessing Civil Penalties, 117 FERC ¶ 61,317 (Dec. 21, 2006) at 5 (hereinafter “Statement of Administrative Policy).
34. 18 C.F.R. §§ 385.401 – 385.411.
35. Id. at § 385.506.
36. Id. at § 385.509(a).
37. Id. at §§ 385.704, 385.707.
38. Id. at § 385.708. See also Statement on Administrative Policy at 6.
39. 15 U.S.C. § 717r; 16 U.S.C. § 825l.
40. Statement of Administrative Policy at 6.
41. Id. See also 16 U.S.C. § 823b(d)(3)(B).
42. See Policy Statement at 8.
43. Statement of Administrative Policy at 9-10.
44. See Request of Amaranth Advisors L.L.C., Amaranth Advisors (Calgary) ULC, Amaranth Management Limited Partnership and Amaranth Group Inc. for Expedited Rehearing to Terminate Show Cause Order for Lack of Subject Matter Jurisdiction, Docket No. IN07-26-000 (F.E.R.C. Aug. 27, 2007); Energy Transfer Partners, L.P. Expedited Request for Rehearing and Request for Stay, Docket No. IN06-3-002 (F.E.R.C. Aug. 27, 2007).
45. See Plaintiff’s Motion for a Temporary Restraining Order, Preliminary Injunction, and Declaratory Relief, Hunter v. FERC, No. 07-1307 (D.D.C.). Amaranth sought to stay FERC’s investigation pending resolution of the CFTC’s enforcement action against, arguing that FERC was acting outside of its authority. See Defendants’ Motion for a Preliminary Injunction Staying the Federal Energy Regulatory Commission, U.S. Commodity Futures Trading Comm’n v. Amaranth Advisors LLC, No. 07-6682 (S.D.N.Y.). The district court denied that motion, however, finding that it lacked authority to stay the actions of a non-party such as FERC. See U.S. Commodity Futures Trading Comm’n v. Amaranth Advisors LLC, No. 07-6682, slip op. (S.D.N.Y. Nov. 1, 2007).

46. See The Federal Energy Regulatory Commission’s Opposition to Defendants’ Motion for Preliminary Injunction, CFTC v. Amaranth, at 2.
47. See Plaintiff’s Memorandum of Law in Opposition to Defendants’ Motion for a Preliminary Injunction Staying the Federal Energy Regulatory Commission, CFTC v. Amaranth, at 9-19.
48. See Energy Transfer Partners, L.P. Expedited Request for Rehearing and Request for Stay, Docket No. IN06-3-002 (F.E.R.C. Aug. 27, 2007).
49. Belle Fourche Pipeline Co. v. United States, 751 F.2d 332, 334 (10th Cir. 1984).
50. 15 U.S.C. § 717m(d); 16 U.S.C. § 825f(c).
51. Id.
52. Fed. Power Comm’n v. Metropolitan Edison Co., 304 U.S. 375 (1938).
53. See, e.g., Sandsend Fin. Consultants, Ltd. v. Fed. Home Loan Bank Bd., 878 F.2d 875, 878 (5th Cir. 1989) (an administrative agency’s power to issue subpoenas as it performs its investigatory function is a broad-ranging one which courts are reluctant to trammel).
54. Policy Statement at 9-10.
55. Id.
56. Amaranth Show Cause Order at ¶¶ 122-131.
57. Id.
58. Policy Statement at 10.
59. Id. at 12-13.
60. Amaranth Show Cause Order at ¶ 133.

61. Policy Statement at 12 (emphasis added).
62. Id. at 11-12.