Yesterday, the FTC announced it was seeking public comments on its proposed revised rule “that would prohibit market manipulation in the petroleum industry.”  According to the FTC:

The revised proposed rule in the RNPRM announced today retains the anti-fraud approach of the August 2008 proposed rule. The revised proposed rule would prohibit fraudulent and deceptive conduct that could harm wholesale petroleum markets. Specific examples of prohibited conduct include false public announcements of planned pricing or output decisions, false statistical or data reporting, and wash sales intended to disguise the actual liquidity or price of a particular product or market for that product. The revised proposed rule also would prohibit material omissions from a statement that, although otherwise literally true, are misleading under the circumstances.

Specifically, the revised proposed rule would prohibit anyone, 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 tends to distort market conditions for any such product.

The revised proposed rule would not impose any affirmative duties, obligations, or record-keeping requirements. Anyone violating an FTC rule promulgated under EISA, such as the revised proposed rule, if adopted, may face civil penalties of up to $1 million per violation per day, in addition to any relief available to the Commission under the FTC Act.

The proposed revised rule can be found here.

Share on Facebook

Comment feed: RSS 2.0. You can leave a response, or trackback from your own site.