Barclays to fight $453 million power fine in U.S. court
By David Sheppard and Steve Slater
NEW YORK/LONDON (Reuters) - Barclays will contest a record $453 million fine imposed by a U.S. energy regulator against the British bank and four of its power traders, setting up a likely federal court battle.
The fines, which were upheld by the Federal Energy Regulatory Commission (FERC) on Tuesday, confirm the top U.S. energy cop will pursue its most ambitious market manipulation case to date.
For Barclays, the sanction is the latest of a series of scandals that include a $450 million fine by U.S. and UK regulators for rigging global benchmark interest rates last year.
But unlike its settlement over Libor (London Interbank Offered Rate), where the bank accepted wrongdoing, it has fought the FERC allegations from the start.
FERC first proposed the fines in October 2012 over alleged manipulation of Californian and other western power markets by the British bank in the last decade.
Tuesday's ruling said FERC commissioners agreed with earlier findings by regulatory staff, which said the bank deliberately lost money in physical power markets to benefit its financial positions between 2006 and 2008, and that the Barclays traders knew their activity was unlawful.
FERC also ordered Barclays to hand back $34.9 million in "unjust profits" to low-income home energy assistance programs in Arizona, California, Oregon and Washington to benefit electricity customers there.
"We have cooperated fully with the FERC investigation," Barclays spokesman Marc Hazelton said in a statement on Tuesday. "We intend to vigorously defend this matter." Continued...