Barclays hit with £300m fine for price fixing

A US regulator has demanded Barclays, and four of its traders, coughs up $453m (£300m) in civil penalties for manipulating electric energy prices.

The fine comes little more than 12 months after the Financial Services Authority fined Barclays Bank a then record £59.5m, part of a package of £290m worth of penalties from regulators in the UK and US, for misconduct after it was found to have been ‘lowballing’ the London interbank offered rate and the Euro interbank offered rate.

The Federal Energy Regulatory Commission issued the latest fine in relation to traders’ interfering with energy prices in California and other western markets between November 2006 and December 2008 in order to benefit its own positions.

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The FERC also ordered Barclays to disgorge $34.9m (£23.1m), plus interest, in unjust profits to the Low-Income Home Energy Assistance Programs of Arizona, California, Oregon, and Washington.

In the order, FERC finds Barclays and traders Daniel Brin, Scott Connelly, Karen Levine and Ryan Smith built and then flattened monthly physical index positions at four of the then-most liquid trading points in the western US.

The purpose, the regulator stated, was manipulating the index price to benefit Barclays’ financial swap positions.

The US’ Federal Power Act authorises penalties for such manipulative acts of up to $1m (£662,525) per day per violation. These penalties must be paid to the US Treasury within 30 days.

At the time of the Libor fine, Barclays said the actions “fell well short of standards”. Chief executive Bob Diamond said he would give up his bonus for that year; just days later Mr Diamond resigned.