ASIC Sues Delta Over Alleged Market Manipulation

ASIC is filing a lawsuit against the holding company that owns the Vales Point coal power station in New South Wales, claiming it manipulated energy futures contracts to gain an unfair advantage. The corporate regulator alleges this conduct may have distorted electricity prices and reduced trust in the market.

According to ASIC, Delta, which operates the Vales Point facility, engaged in the suspected misconduct between September and October 2022. During that time, the company allegedly placed strategic orders in the electricity futures market. Vales Point supplies around 4% of the electricity used in Australia's National Electricity Market and plays an important role in New South Wales' energy system.

ASIC states that Delta made trades shortly before market close on 30 separate occasions, in a manner that appeared to affect the daily settlement prices for quarterly NSW electricity futures. The regulator believes these actions were intended to improve the company's position in negotiating a significant power purchase agreement. Internal procedures within Delta reportedly allowed the trades to occur, and ASIC argues that the activity misrepresented trading intentions and could mislead other market participants.

ASIC says this behaviour could reduce confidence in Australia's commodity derivatives markets and harm the reliability of electricity pricing. Although the trades took place before Delta was acquired by its current international owner in late 2022, the company has acknowledged the civil proceedings and states it has co-operated fully with ASIC's investigation.

Source: Australian Financial Review, Mondo Visione, FX News Group