Prohibitions On Market Manipulation and False Information in Subtitle B of the Energy Independence and Security Act of 2007 #535819-00100

Submission Number:
Bret Morris
Initiative Name:
Prohibitions On Market Manipulation and False Information in Subtitle B of the Energy Independence and Security Act of 2007
Thank you for the opportunity to comment on the proposed rule concerning the manipulation of the petrolem market. The FTC is rightfully concerned about the harm such actions do to consumers and the economy overall. It has recently come to light that Texas based power companies have been manipulating the price of electricity since the state deregulated the industry, thereby causing irreparable harm to Texas consumers. Nationally, it has also come to light that there is and has been no oil shortage since 9/11 and that the price consumers have been paying for gasoline is all a result of futures traders buying options contracts for barrels of oil that far exceed the current or expected future demand so that a "paper shortage" of the commodity is created, thereby causing the price per barrel to rise and consumers' to be robbed of their hard earned income. I'm sure the American Petroleum Institute (API), which recently requested you to extend the comment period by an additional 60 days, will create and devise many novel arguments against the proposed rule with this extra comment time the FTC has granted. However, I caution the FTC to consider any comment submitted by the API in the spirit in which it is submitted. This spirit is of course, that of a lobbyist. Someone whose sole existence is to manipulate our politicians and government officials in to taking action to protect their members regardless of the cost or harm done to consumers. That is the API's job. And we can all be assured that they will give it their best shot. Please do not lose sight of the reasons this proposed rule was published in the first place. Regarding the content of the proposed rule, it is my suggestion that Section 812 should be restructured to prohibit the reporting of any information to a federal agency that is false or misleading regardless of a person’s intent and regardless of whether he knew or should have known the information to be false or misleading. Zero Tolerance must be the rule of the day regarding manipulation of energy pricing because there is too much at stake for the U.S. consumer and the health of the U.S. economy. Zero Tolerance must be imposed for any manipulation of the petroleum markets must be prohibited and aggressively enforced, including the wholesale and point-of-sale pricing of petroleum derivatives, such as gasoline for our vehicles and electricity for our homes. Due diligence in supply and demand pricing by importers, producers, refiners, wholesalers, and resellers should be the status quo. Futures traders MUST be prohibited from manipulating the market by ordering more barrels than needed by current demand. The level of enforcement that is taken when a violation is discovered should be dependent upon whether the transgression was deliberate or merely an accident, but there MUST be enforcement because the harm caused by such actions is too destructive to do otherwise. However, both categories of violators must receive punishment commensurate with their potential harm to the U.S. consumer and the U.S. economy. I would recommend a base civil money penalty of $20,000 per incident for those violations which are accidental, or can not be proved otherwise. For violations proved to have been intended and violations in which a person knew or should have reasonably known would violate these prohibitions, the base civil money penalty should be $100,000 per incident and a mandatory minimum of 36 months imprisonment in a federal corrections facility. Once again, thank you for the opportunity for consumers to comment on the proposed rule.