Shepherd Energy AB, the Stockholm-based investment firm, said it accidentally breached Nordic power market-manipulation rules that led to its 150,000 Norwegian kroner ($26,200) fine from Nasdaq OMX Group Inc.
“The fact that we bought and sold a contract at the same price within a short time interval was unintentional, and we did not intend to manipulate prices,” Arne Oesterlind, manager of the firm’s Shepherd Energy Fund, said today by e-mail. “We have not made any money from the transaction, nor have we caused additional costs for other counter-parties.”
In April, Shepherd bought 1 megawatt-hour of Nasdaq OMX’s July 2012 power contract while selling 7 megawatt-hours of the same product at the same price in the over-the-counter market, the exchange said in an e-mailed statement today.
The suspected manipulation is a “very serious violation, as it can undermine the trust and integrity” of the market, according to the statement. “Shepherd should have been aware of what signals these actions gave or could give to other market participants.” The exchange said it couldn’t rule out that Shepherd’s actions were non-deliberate.
Nasdaq OMX’s Nordic energy exchange is the world’s largest power derivatives market, with more than 330 trading and clearing members in 15 countries. The bourse carried out eight market-manipulation investigations in the three months through December. The Federal Energy Regulatory Commission in Washington has stepped up its drive to combat electricity market manipulation in the U.S.
The exchange’s maximum sanction is a violation charge of as much as 2.5 million Norwegian kroner, Erik Korsvold, head of market surveillance at the Oslo-based exchange, said on Feb. 18 by e-mail.