UK Plans Crackdown on Energy-Market Rigging

The United Kingdom announced a crackdown on people rigging the energy market, passing new laws that would give national regulators new powers to prosecute suspects.

‘Anyone found guilty of rigging wholesale gas and electricity prices could face up to two years in jail under proposals being put forward by Energy and Climate Change Secretary Ed Davey today,’ reads a note released on Wednesday.  

Under the new laws, fixing the price at artificial level or using insider information would be a criminal offence.  

‘It would also be an offence to make misleading claims or conceal facts about wholesale energy prices to manipulate the market – especially if it could affect competition in the energy market.’

The changes might take effect in spring 2015, pending the consultation and Parliamentary process.  

‘Introducing these criminal sanctions is part of the government’s reforms to the energy market to put consumers first. The government is breaking up the stranglehold of the Big Six, encouraging more competition and ensuring energy companies provide simpler tariffs. Last week the Competition and Markets Authority announced that it would carry out an investigation into competition and transparency in the retail energy market, which is crucial to rebuilding consumer trust.’

In November 2012, Ofgem and the Financial Services Authority (FSA) launched investigation after whistleblower Seth Freedman said he witnessed manipulation of wholesale gas prices.  One year after, in November 2013, the two authorities said they have not found evidence of market manipulation.