Barclays to fight £300m penalty for price fixing

Barclays is to contest a record $453 million (£300m) fine imposed by US regulators against the UK bank and four of its traders, setting up a probable federal court showdown.

The Federal Energy Regulatory Commission (FERC), which upheld penalties first imposed in October, accused Barclays and the traders of a “co-ordinated and intentional effort” to fix electricity prices in California and other US states between November 2006 and December 2008.

It has given the bank 30 days to pay the fines, but Barclays yesterday vowed to “vigorously defend” the matter.

Hide Ad
Hide Ad

It is the latest blow to the bank after it was hit last summer with a £290m fine relating to the fixing of interbank lending rates. That scandal claimed the scalp of former chief executive Bob Diamond.

The FERC said the level of the financial sanctions imposed reflected the “seriousness of the violations and the lack of any effort by Barclays and the traders to remedy their violations”.

As well as a $435m fine against Barclays, the regulator has ordered Scott Connelly, then managing director of North American power at the bank, to pay $15m, while fellow traders Daniel Brin, Karen Levine and Ryan Smith must pay $1m each. The four traders have since left the group.

The FERC alleges that Barclays manipulated the electricity market for a total of 655 days, costing other firms nearly $140m by driving power prices up and down to the benefit of derivatives positions held by the bank.

Related topics: