Potential Danish REMIT breach referred to public prosecutor

Author: Thomas Rodgers

2015/05/07

Denmark’s natural gas market regulator has asked the Danish Prosecution Service to start a criminal investigation into whether a company has manipulated the wholesale market, it emerged on Thursday.

The referral for a criminal investigation is the first of its kind submitted by The Danish Energy Regulatory Authority (DERA).

The investigation relates to whether a company has breached Article 5 of the Regulation on Wholesale Energy Market Integrity and Transparency (REMIT). The article states that market manipulation, as well as attempted market manipulation, of wholesale energy markets is prohibited.

The case will be undertaken by the public prosecutor of serious economic and international crime, DERA said on its website.

The Agency for the Cooperation of Energy Regulators said in a recent report that 30 cases of potential breaches of the regulation were being investigated at the end of 2014. No case has led to a conviction yet for market manipulation or attempted market manipulation under the regulation that ICIS knows of, which could make this case significant if it leads to a conviction.

In 2013, the Danish Parliament adopted an act which enshrined penalties for breaches of REMIT into national law.

The act granted DERA powers to collect information from public authorities and perform on site inspections or dawn raids. Should the regulator suspect any breaches of REMIT, it then refers its findings to the state prosecutor to conduct its own investigation.

Penalties for violating rules on market manipulation and insider trading can result in imprisonment of up to 18 months. If manipulation occurs under aggravated circumstances, imprisonment of up to six years is possible.

Companies or individuals can appeal decisions through the Danish Energy Board of Appeal.

The Netherlands Authority for Consumer Markets (ACM) told ICIS in 2014 it was expecting to see a market manipulation case in 2015 (see EDEM 06 November 2014). thomas.rodgers@icis.com