The Australian Securities and Investments Commission (ASIC) is suing the operator of a power station for allegedly manipulating the market for electricity futures contracts.
ASIC is taking action in the Federal Court of Australia against Delta Power & Energy (Vales Point) Pty Ltd, formerly named Sunset Power International Pty Ltd, which is owned by Czech-based energy group Sev.en Global Investments.
The market regulator has alleged that on 30 occasions between 8 September and 6 October 2022 Delta placed orders for New South Wales Peak Load Electricity Futures Contracts shortly before the close of the Australian Securities Exchange’s ASX 24 derivatives market for the improper purpose of affecting the daily settlement price.
ASIC alleges this:
- created a false or misleading appearance that Delta’s purpose was to purchase the quarterly futures contracts at the lowest realisable price
- created a false or misleading appearance that the daily settlement price for the contracts (and the daily settlement price for the corresponding calendar year ‘strip’ products) reflect the forces of genuine supply and demand in an open, informed and efficient market, and
- influenced the level at which the daily settlement price of the contracts was generated or administered.
ASIC Chair Joe Longo said manipulation of the daily settlement price of ASX 24 electricity futures contracts could create a commercial benefit at the expense of others in the market and adversely impact market integrity.
“The consequences of manipulating energy markets, especially in times of market stress and volatility, can flow through to the real economy, for example, as higher supplier funding costs, and in turn, energy prices,” Longo said in a media release.
“Manipulation in energy and commodities derivatives markets has been a particular focus for ASIC in recent years and we will continue to act against conduct that undermines market confidence.”
ASIC is seeking declarations and pecuniary penalties against Delta.
The matter will be listed for a case management hearing on a date to be fixed by the Court.
