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FTC begins rule on oil manipulation

AP

FTC begins rule on oil manipulation

By H. JOSEF HEBERT, Associated Press WriterThu May 1, 8:29 PM ET

WASHINGTON – The Federal Trade Commission said Thursday it hoped to complete rules by the end of the year on how it plans to enforce a new law against price manipulation and deception in the oil-trading markets.

The FTC announced that has taken the first step, seeking public comments, toward developing a regulation on oil industry price manipulation.

As part of a broad energy bill passed in December, Congress gave the FTC expanded authority to pursue price manipulation in the oil markets and made it illegal for anyone to provide false information to federal agencies about oil prices.

“We understand that consumers are being hurt by high gas prices and the commission remains vigilant in using its full authority to prevent unlawful behavior that affects gas prices,” FTC Chairman William Kovacic said in a statement.

He said the request for public comment will help the agency “assess quickly and thoughtfully how the commission’s new market manipulation authority may be used to protect the American people.”

Among the questions that the FTC hopes to get a clearer sense of is the definition of market manipulation and what should be considered “false and misleading” information in its enforcement of the new law.

The law makes it illegal to use deception or manipulation in the purchase or sale of crude oil, gasoline or petroleum distillates. Violators could face a civil penalty of up to $1 million.

The FTC will propose new regulations after the 30-day comment period, with an intention to conclude the rule-making by the end of the year.

The announcement was welcomed on Capitol Hill.

“We’ve been waiting for the FTC to act,” said Sen. Maria Cantwell, D-Wash., who has recently written the FTC to ask why the rule-making was being delayed.

House Speaker Nancy Pelosi, D-Calif., praised the FTC’s “long overdue action of moving forward on efforts to examine the manipulation of energy prices.” She also had written the FTC asking why the rule-making hadn’t begun.

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On the Net

Federal Trade Commission http://www.ftc.gov

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