FTC Issues Final Petroleum Market Manipulation Rule
By Michael P. A. Cohen and Mark K. Lewis
Effective November 4, the Federal Trade Commission will begin enforcing a new Petroleum Market Manipulation Rule under the Energy Independence and Security Act of 2007. The Rule states:
It shall be unlawful for any person, directly or indirectly, in connection with the purchase or sale of crude oil, gasoline, or petroleum distillates at wholesale, to:
(a) Knowingly engage in any act, practice, or course of business including the making of any untrue statement of material fact that operates or would operate as a fraud or deceit upon any person; or
(b) Intentionally fail to state a material fact that under the circumstances renders a statement made by such person misleading, provided that such omission distorts or is likely to distort market conditions for any such product.
16 C.F.R. § 317.3. Violations of the Rule are punishable by civil penalties up to $1 million per violation. Each day misconduct continues is a separate offense. 42 U.S.C. § 17304.