A new Federal Trade Commission (FTC) rule, commonly known as the FTC Market Manipulation Rule, goes into effect Wednesday, November 4, 2009 and could impose major fines on energy companies for misleading conduct or statements. See detailed information below for specifics on the new rule.

Each organization its US affiliates is responsible for adhering to the new law. The rule not only conveys a heightened need for accuracy with regard to public, commercial and governmental disclosures, but also a potential duty to supplement or correct information. Accordingly, organizations must exercise great care in handling all of their communications, whether with customers, commercial parties, the media, government agencies (including data reporting), or any third-party entity.

In addition, the FTC Market Manipulation Rule may apply in some instances to conduct (not just communications) deemed fraudulent or deceitful. Please consult with Legal for advice regarding business practices that may fall into this category.

FTC Market Manipulation Rule Information:
On August 6, 2009, the Federal Trade Commission issued a final rule prohibiting any person, directly or indirectly, in connection with the purchase or sale of crude oil, gasoline, or petroleum distillates at wholesale, from:

(a) Knowingly engaging 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 failing 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.

The FTC has enforcement authority and can issue civil penalties up to $1,000,000 per day per violation.