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February 01, 2013
Brattle Senior Consultant Shaun Ledgerwood Featured in Platts Article on Deutsche Bank Settlement with FERC

Brattle senior consultant Shaun Ledgerwood has been featured in a January 28, 2013 article of Platts Inside FERC, which highlights a recent $1.5 million settlement reached by Deutsche Bank and the Federal Energy Regulatory Commission (FERC) to resolve market manipulation allegations stemming from unjust profits the bank made while trading in California energy markets. In September 2012, the FERC found that the bank engaged in market manipulation when it scheduled and traded energy in the California Independent System Operator market to benefit their congestion revenue rights (CRRs) from January 29, 2010 through March 24, 2010. Through their investigation, FERC enforcement staff concluded that the bank’s activities constituted market manipulation for several reasons, including the fact that the physical trades were not consistent with market fundamentals. Additionally, FERC found that traders acted with manipulative intent by engaging in physical transactions with the intent to increase the value of Deutsche Bank’s CRRs position. Dr. Ledgerwood, a former FERC economist who specializes in the analysis of uneconomic, fraudulent, or anticompetitive behavior in physical and financial markets, commented on the parallels of this case with other market manipulation cases that come before the FERC. In the article, he argues that many of these cases involve a similar type of behavior of purposefully losing money to benefit some targeted position. “Whether it’s outright fraud or economic fraud in the form of uneconomic trades, they both have the same effect of biasing a market outcome to benefit some other related position,” says Dr. Ledgerwood.