Fights between financial businesses and their regulators usually take place in the dark, at least until there are charges, or a settlement. But last week owners of two private companies pushed their struggles against what they claim is overbearing government into the public eye:

Energy trades. Together, twins Kevin and Richard Gates learned math at Conestoga High School, earned chemical engineering degrees at the University of Virginia, and helped found TFS Capital of West Chester, where they and their partners manage more than $1 billion in other people's money.

In 2008 they teamed with onetime Enron energy trader Houlian "Alan" Chen, Ph.D., and some friends to start Powhatan Energy Fund L.L.C., which Chen used to buy and sell electricity on the market run by Audubon, Pa.-based PJM Interconnection, which runs the grid that moves power through 13 states.

Chen made millions, partly by targeting and collecting "loss credit" payments that PJM gave traders when prices moved to unattractive levels, in hopes of keeping the markets going. In 2010 the Federal Energy Regulatory Commission told Powhatan it was investigating those trades for "market manipulation."

The Gateses hired lawyers. They denied wrongdoing. They had checked Chen's strategies and were sure they conformed to FERC and PJM rules.

In August, FERC warned Powhatan it was preparing "preliminary charges." FERC wrote that in some trades, "Chen had little or no expectation of profit from market fundamentals but instead sought to derive profit solely from loss credits." FERC said Powhatan and related funds "netted more than $4.7 million in profit by manipulating PJM's energy market."

The Gateses set up a website,, to show FERC's letters, their own rebuttals, and videos of experts - a former FERC enforcement director, two former SEC chief economists - who insist Chen followed the rules.

The Gateses took the site live last week because they believe charges are imminent and they want to get their story out. "No comment," FERC spokeswoman Celeste Miller told me. PJM officials said the same.

Joseph Bowering, of Monitoring Analytics Inc., PJM's official independent "market monitor," won't comment either. But, he told me, "as a general statement, following the rules does not mean you are not manipulating the market. It's not a defense."

Nightclub insurer. Jeffrey Cohen insures nightclubs, restaurants, and taverns. Or used to.

He says his company, Indemnity Insurance Corp. of Sparks, Md., which chose Delaware as its regulator (the state advertises efficient service), was preparing for an initial public stock offering last year when insurance bureaucrats had it declared insolvent and took control.

Cohen insists his company had piles of cash, and that state control has wrecked it. Delaware courts shot down his attempts to take it back.

Last week a frustrated Cohen, in a federal lawsuit, accused Delaware's elected Insurance Commissioner Karen Weldin Stewart, a Democrat, of taking Indemnity in "a vindictive attempt at retribution" for his support for her Republican opponent in the 2012 elections. Stewart's spokeswoman declined to comment.

Cohen also launched a wider attack on Delaware regulation, noting its commissioners, elected with out-of-state campaign contributions, hire private exam firms to review and discipline companies.

Cohen says that's a conflict: For-profit examiners get paid extra when they claim to find problems. He posted case documents on a website, And he's hoping to make common cause with Delaware legislators upset by higher rates on Stewart's watch.

215-854-5194 @PhillyJoeD