FERC socks Deutsche Bank with $1.5M fine, other penalties


Deutsche Bank could see a $1.5 million fine for its alleged power market manipulations in California, according to reports earlier this week.

Deutsche Bank had disputed the Federal Energy Regulatory Commission's (FERC) accusations that it manipulated markets between January 29, 2010, and March 24, 2010. FERC's investigations found the bank violated the Commission's anti-manipulation rule by engaging in a scheme in which Deutsche Bank entered into physical transactions to benefit its financial position, its Congestion Revenue Rights (CRR) position at the Silver Peak intertie.

FERC also concluded that Deutsche Bank's physical transactions were not consistent with market fundamentals, but were rather undertaken with the intent to change the value of CRRs. Ultimately, FERC concluded that Deutsche Bank's manipulation hindered the proper functioning of the California ISO's CRR and physical markets and violated Commission regulations requiring companies with market-based rate authority to provide accurate information.

A settlement agreement has been reached between FERC's Office of Enforcement and Deutsche Bank Energy Trading  to resolve an Order to Show Cause proceeding regarding this matter.

Although socked with a civil penalty of $1.5 million and an order to disgorge unjust profits of $172,645, plus interest, resulting from its trading in California Independent System Operator markets at the Silver Peak intertie, Deutsch Bank neither admits nor denies the violations.

Deutsche Bank must pay the civil penalty within the next 10 days.

For more:
- see the Stipulation and Consent Agreement