Barclays fined $453m

US energy regulator Civil penalties imposed for violation of the Federal Power Act and FERC’s Anti-Manipulation Rule.

New Statesman
Barclays bank logo. Credit: Getty Images.

Barclays and its traders Daniel Brin, Scott Connelly, Karen Levine, and Ryan Smith have been imposed a  fine of $453m (£300m) by the Federal Energy Regulatory Commission (FERC) for manipulating electric energy prices in California and other western markets of the country between November 2006 and December 2008.

As a remedy for violations of the Federal Power Act and FERC’s Anti-Manipulation Rule, Connelly will pay a fine of $15m, while Brin, Levine and Smith will each pay a fine of $1m as their actions were found to be a coordinated and intentional effort of manipulation.

The British bank should pay the penalties to the US Treasury within a month, as per the regulator’s order.

Meanwhile, the British bank will distribute $34.9m of unfair profits including interest to the low-income home energy assistance programs of Arizona, California, Oregon, and Washington.

The regulator, in a statement, said that "Barclays and its four traders built and then flattened substantial monthly physical index positions at four of the then-most liquid trading points in the western United States for the fraudulent purpose of manipulating the index price to benefit Barclays’ financial swap positions."

As per the Federal Power Act, penalties for manipulation of acts could be up to $1m per day per violation.

The regulator may seek affirmation of the penalties from a federal district court in the event Barclays and the traders do not pay fines.