UK: Barclays fined for US price fixing
- Credit: PA
Barclays and four of its traders have been fined 453 million dollars (£300 million) by United States regulators for manipulating power prices.
In a fresh blow for the scandal-hit bank, the Federal Energy Regulatory Commission (FERC) also ordered the lender to pay at least 34.9 million dollars (£23 million) of “unjust profits” to the low-income home energy assistance programmes of Arizona, California, Oregon and Washington.
FERC, which upheld fines first imposed in October, accused Barclays and its traders of a “co-ordinated and intentional effort” to fix electricity prices in California and other western US states between November 2006 and December 2008. It has given the bank 30 days to pay the fines.
Barclays vowed to “vigorously defend this matter”.
FERC said the level of the fines reflect the “seriousness of the violations and the lack of any effort by Barclays and the traders to remedy their violations”.
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As well as a 435 million dollar (£288 million) fine against Barclays, FERC has ordered Scott Connelly, then managing director of North American power at the bank, to pay 15 million dollars (£9.9 million), while fellow traders Daniel Brin, Karen Levine and Ryan Smith must pay one million dollars (£662,000 ) each.
FERC said it found a trail of emails and instant messages that revealed the power price rigging.
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One email from Mr Brin revealed how he was “trying to drive price in fin 1/8ancial 3/8 direction”, while another from Mr Smith described how he “totally f***** with the Palo market” and “propped up the Palo index”.
FERC alleges that Barclays manipulated the electricity market for a total of 655 days, costing other firms nearly 140 million dollars (£93 million) by driving power prices up and down to the benefit of derivatives positions held by the bank.
The fine comes as Barclays is already battling to repair its image in the wake of its £290 million Libor rigging scandal last summer, which claimed the scalp of former chief executive Bob Diamond.
Barclays’ new boss Antony Jenkins has since led a crusade to overhaul the culture at the bank, telling staff to adhere to a new set of values or quit.