This week’s corporate law news roundup includes discussions of Maryland’s offshore wind energy initiative; the SEC’s recent charges against former head Nomura Traders; and the Ninth Circuit’s decision to end an energy rate fixing suit against a JPMorgan subsidiary.
MARYLAND PUBLIC SERVICE COMMISSION AWARDED OFFSHORE WIND RENEWABLE ENERGY CREDITS TO TWO PROJECTS
On May 11, 2017, the Maryland Public Service Commission (PSC) awarded offshore wind renewable energy credits (ORECs) to US Wind, Inc. and Skipjack Offshore Energy, LLC, enabling the construction of 368 megawatts of capacity, projected to result in almost $2 billion of in-state spending, create almost 10,000 jobs, and contribute almost $75 million in state tax revenues over 20 years. According to the PSC’s press release, the award will further the PSC’s efforts to establish Maryland as a regional hub for the burgeoning wind energy industry. These companies will be required to use port facilities in the greater Baltimore region and Ocean City for construction, operations and maintenance activities. A further condition of the award will require each developer to create opportunities for minority-owned companies to participate as investors as well as in the development and construction of the wind energy projects. For more information, see http://www.psc.state.md.us/wp-content/uploads/PSC-Awards-ORECs-to-US-Wind-Skipjack.pdf
SEC CHARGES FORMER NOMURA TRADERS WITH FRAUD
On May 15, 2017, the Securities and Exchange Commission charged a pair of former head traders who ran the commercial mortgage-backed securities (CMBS) desk at Nomura Securities International Inc. with deliberately lying to customers in order to inflate the profits of the CMBS desk and line their own pockets as a result. According to SEC allegations, the accused Nomura traders misrepresented price information while acting as intermediaries on trades with Nomura’s customers who sought to buy and sell CMBS on the secondary market. In certain instances, the traders allegedly pretended they were still negotiating bond purchases with a third-party seller at higher prices when Nomura had already acquired the bonds at a lower price. For more information, see https://www.sec.gov/news/press-release/2017-102.
FEDERAL CIRCUIT COURT ENDS JPMORGAN’S ENERGY RATE-FIXING SUIT
On May 12, 2017, a unanimous Ninth Circuit panel affirmed a District Court decision involving a class action suit alleging fraudulently inflated electricity rates on the part of a JPMorgan Chase & Co. subsidiary, JPM Ventures. The plaintiffs had sought damages in a civil action under the Racketeer Influenced and Corrupt Organizations Act (RICO). The plaintiffs alleged that JPM Ventures fraudulently manipulated rates in California’s wholesale electricity market, resulting in higher electricity costs for retail consumers. Applying the so-called filed-rate doctrine, the Ninth Circuit concluded that courts are prohibited from meddling with rates that have been approved by regulators, and that as a consequence, electricity customers cannot seek damages related to prices agreed upon by the Federal Energy Regulatory Commission. For more information, see https://cdn.ca9.uscourts.gov/datastore/memoranda/2017/05/12/15-56697.pdf.