Contract analysis

I. Purpose and Scope of Memorandum This memorandum sets forth a comprehensive preparation outline for the forthcoming investigative testimony of Derek Sung, Senior Vice President, Power Marketing & Trading, Dunmore Power Trading LLC ("DPT"), scheduled for September 19, 2023. The testimony is being taken pursuant to 18 C.F.R. § 1b.12 before staff of the Federal Energy Regulatory Commission's Office of Enforcement ("FE

II. Background on Derek Sung A. Position and Responsibilities Mr. Sung's full name is Derek Sung. He currently holds the title of Senior Vice President, Power Marketing & Trading, Dunmore Power Trading LLC. He is 44 years old and is based at DPT's principal office in Houston, Texas, located at 2200 Post Oak Boulevard, Suite 3100, Houston, TX 77056. Within the Dunmore corporate structure, Mr. Sung reports directly to

III. Anticipated Areas of FERC Staff Questioning Based on our review of the investigation record, the two prior testimony sessions, and the pattern of FERC Staff's data requests, we anticipate that FERC Staff will focus on the following areas during Mr. Sung's testimony. Each subsection below identifies the anticipated line of questioning, the key documents and facts at issue, and our recommended approach for Mr. Sun

I. Knowledge of MISO Independent Market Monitor Concerns The investigation originated from a referral by the MISO Independent Market Monitor ("IMM"), Velthorn Market Analytics, Inc., led by Dr. Patricia Engel. Velthorn submitted a referral letter to FERC OE on April 3, 2023, identifying DPT's bidding patterns at the Indiana Hub as potentially manipulative. FERC Staff may inquire about whether Mr. Sung was aware of an

IV. Key Documents for Witness Review The following categories of documents from the production should be assembled and reviewed by Mr. Sung prior to testimony. The documents should be organized in a preparation binder by category and, within each category, in chronological order:

1. Trading Desk Policies and Procedures Manuals: Current and historical versions of DPT's MISO trading desk operating procedures, including any policies governing Day-Ahead offer pricing, virtual trading, and FTR portfolio management in effect during the Relevant Period.

2. Sung-Renfro Communications: Mr. Sung's emails, instant messages (including Vireo Software messages and internal DPT chat logs), and memoranda with Mr. Renfro regarding Day-Ahead strategies, including any communications discussing negative offer pricing at the Indiana Hub.

3. Sung-Petrov Communications: Mr. Sung's emails, instant messages, and memoranda with Ms. Petrov regarding Real-Time and virtual trading strategies, including any communications discussing virtual positions at the Minnesota Hub.

4. DMP Communications: Mr. Sung's communications with DMP personnel regarding gas nominations, scheduling, and fuel supply coordination for gas-fired generation plants.

5. FTR Strategy Documents: FTR auction bid submissions, strategy memoranda prepared by the quantitative analytics group, FTR portfolio position reports, and any communications regarding FTR acquisition decisions during or prior to the Relevant Period.

6. Risk Management Reports and P&L Summaries: Daily and weekly P&L reports for the MISO desk during the Relevant Period, position limit reports, and any risk management escalation reports.

7. Sung-Mirova Communications: Mr. Sung's communications with Ms. Mirova regarding trading desk performance, strategy, and any specific discussions of the Day-Ahead bidding strategies or FTR portfolio.

8. Trader Compensation Documentation: Compensation plans, bonus calculations, performance metrics documentation, and any communications regarding trader compensation for Mr. Renfro, Ms. Petrov, and other MISO desk traders.

9. Pre-Existing Compliance Policies: DPT's compliance manual, code of conduct, and any policies governing market conduct or regulatory compliance in effect during the Relevant Period prior to Ms. Caulfield's appointment.

10. Caulfield Appointment Materials: Communications relating to the appointment of Jennifer Caulfield as Chief Compliance Officer on February 6, 2023, including any memoranda or directives issued by Ms. Caulfield regarding changes to compliance oversight of the trading desk. Logistics: Documents should be reviewed at Calderwood & Harkness's Houston office, located at 1001 Fannin Street, Suite 4200, Houston, TX 77002,

V. Coordination with Prior Testimony A. Consistency with Renfro Testimony (September 5, 2023) Mr. Renfro testified on September 5, 2023, in a session that lasted approximately six hours (with breaks). He was identified by FERC Staff as the primary trader responsible for executing the allegedly manipulative Day-Ahead bidding strategies at the Indiana Hub. FERC Staff's questioning of Mr. Renfro focused heavily on the m

VI. Potential Areas of Concern Based on our assessment of the investigation record and the prior testimony sessions, the following areas present the greatest risk for Mr. Sung's testimony:

1. Imputation of knowledge and intent: Mr. Sung's supervisory position means that FERC Staff may attempt to impute knowledge and intent upward from the traders to Mr. Sung and then from Mr. Sung to senior management. Under FERC's enforcement precedents, a supervisor who knew or should have known about manipulative trading activity and failed to prevent it may be held individually liable. Mr. Sung's testimony must car

2. Internal documents showing temporal proximity: If internal documents show Mr. Sung approving or encouraging negative offer strategies in close temporal proximity to FTR acquisitions or FTR portfolio adjustments, FERC Staff may use these documents to establish scienter — the inference being that Mr. Sung understood the relationship between the two and was pursuing a coordinated strategy. These documents should be i

3. Communications suggesting awareness of unusual patterns: Any communications in which Mr. Sung acknowledged that the bidding patterns were unusual, aggressive, or potentially problematic — even in casual language — could be seized upon by FERC Staff as evidence of consciousness of wrongdoing. These communications should be identified and addressed in preparation.

4. Communications with Rhonda Vasquez: Ms. Vasquez serves as Vice President, Regulatory Affairs at DPT. Any communications between Mr. Sung and Ms. Vasquez that discuss the compliance implications of the trading strategies, or that suggest Mr. Sung sought her input on whether the strategies might attract regulatory scrutiny, are potentially significant. If such communications exist, they should be reviewed and Mr. Su

5. Inconsistency risk: There is a risk that FERC Staff will contrast Mr. Sung's testimony with any inconsistent statements by Mr. Renfro or Ms. Petrov. Even minor discrepancies — in timelines, in the description of approval processes, or in the characterization of the business rationale — could be exploited by FERC Staff to undermine the credibility of all three witnesses. The comparison matrix described in Section I

VII. Recommended Preparation Schedule The following preparation schedule is recommended for Mr. Sung prior to his testimony on September 19, 2023: The September 16 mock examination should cover each of the anticipated areas of questioning described in Section III above, with Catherine Bloom taking the lead in conducting the mock examination and Hannah Brinkley taking notes and flagging areas requiring further prepara

VIII. General Testimony Guidelines Mr. Sung should be reminded of the following standard instructions for testimony pursuant to 18 C.F.R. § 1b.12:

1. Listen carefully to each question. Wait until the question is fully asked before beginning to answer. Do not anticipate where the questioner is going or begin formulating a response before the question is complete.

2. Answer only the question asked. Provide a responsive, accurate answer to the specific question posed. Do not volunteer additional information, provide unsolicited context, or steer the conversation to topics that were not asked about, however favorable those topics might be.

3. Do not speculate. If Mr. Sung does not know the answer to a question, he should say "I don't know" or "I don't recall." He should not guess, estimate, or hypothesize unless specifically asked to do so. If he can provide an approximate answer (e.g., "I don't recall the exact date, but it was sometime in early 2022"), he may do so, but should make clear that the answer is approximate.

4. Counsel will be present. Catherine Bloom and Hannah Brinkley will be present throughout the testimony. Counsel may instruct the witness not to answer a question on privilege grounds where appropriate, including questions that call for information protected by the attorney-client privilege or the work product doctrine.

5. Pause before answering privilege-sensitive questions. If a question calls for information that may be protected by the attorney-client privilege or the work product doctrine — including, but not limited to, communications with Martin Llewellyn (General Counsel) or with Calderwood & Harkness — Mr. Sung should pause and allow counsel to assess whether a privilege assertion is warranted before responding.

6. Testimony is under oath. Mr. Sung will be placed under oath at the beginning of the testimony session. All answers must be truthful and complete. A false statement under oath may constitute a violation of 18 U.S.C. § 1001 (false statements to a federal agency) and could expose Mr. Sung to criminal liability independent of any outcome in the FERC enforcement proceeding.

7. Transcript review. A transcript of the testimony will be prepared by a court reporter. Mr. Sung will have the opportunity to review the transcript and submit corrections pursuant to 18 C.F.R. § 1b.12. Corrections should be limited to transcription errors and should not be used to substantively change testimony.

8. Confidentiality of the investigation. The investigation is non-public pursuant to 18 C.F.R. Part 1b. Mr. Sung should not discuss the substance of his testimony with anyone other than counsel — including other DPT employees, other witnesses, family members, or the media. This obligation applies before, during, and after the testimony.

9. Document handling. FERC Staff may present documents during the testimony and ask Mr. Sung to identify or comment on them. Mr. Sung should take his time reviewing any document presented to him before answering questions about it. He should read the entire document (or the relevant portion identified by FERC Staff) before responding and should not answer based on a partial or incomplete review.

10. Demeanor. Mr. Sung should remain calm, professional, and cooperative throughout the testimony. He should not argue with FERC Staff, display frustration or hostility, or make editorial comments about the investigation. He should treat the session as a professional exchange of information.

IX. Open Items and Follow-Up The following action items should be completed before the preparation sessions begin on September 15, 2023:

1. Patrick Gallagher to pull all Sung custodian documents from the production set referencing gas nominations, FTR strategy, and negative Day-Ahead offers, and organize them chronologically for inclusion in the preparation binder. Target completion: COB September 14, 2023.

2. Hannah Brinkley to prepare a comparison matrix cross-referencing the key topics covered in the Renfro and Petrov testimony sessions against the anticipated areas of questioning for Mr. Sung, highlighting areas where consistency is critical and areas where discrepancies may exist. Target completion: COB September 14, 2023.

3. Catherine Bloom to confirm logistics with FERC OE (Lead Investigator Thomas Adebayo) regarding the testimony date, location, expected duration, number of FERC Staff participants, and any documents FERC Staff intends to use as exhibits. Target completion: September 14, 2023.

4. Catherine Bloom / Hannah Brinkley to determine whether FERC Staff has issued any additional document requests, interrogatories, or follow-up inquiries arising from the Renfro or Petrov testimony sessions that could signal new lines of inquiry for Mr. Sung's testimony. If any such requests have been received, they should be analyzed immediately and factored into the preparation outline.

5. Patrick Gallagher to confirm availability of the C&H Houston conference room for the September 15–17 preparation sessions and to arrange for secure document storage and handling during the sessions.

6. Hannah Brinkley to coordinate travel arrangements for Mr. Sung, Ms. Bloom, and Ms. Brinkley to Washington, D.C. on September 18, 2023, and to arrange for a private meeting room at the hotel or at C&H's Washington, D.C. office for the evening review session. This memorandum is protected by the attorney-client privilege and the work product doctrine. It was prepared by counsel in anticipation of litigation and refle