Who Should Regulate Energy Markets?

The FERC’s administrative case against defunct hedge fund manager Amaranth Advisors and certain of its managed funds and traders, along with an action arising out of similar facts brought by the CFTC in federal district court in New York, have raised important questions for U.S. energy regulation: which agency is responsible for ensuring that traders do not cross the line from legal speculation into illegal price manipulation?  If two or more agencies share that responsibility, how are those agencies supposed to coordinate their activities?  Answers to these questions can have a profound effect on hedge funds that trade commodities or commodity derivatives.

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