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LONDON - Barclays has vowed to fight a fine by U.S. regulators, who allege the bank manipulated the electricity prices in California and other western states to make money off of trades.
American regulators on Tuesday ordered the U.K.-based bank and four of its traders to pay $453 million in civil penalties for manipulating electricity prices between November 2006 and December 2008.
The Federal Energy Regulatory Commission also ordered Barclays to pay $34.9 million, plus interest, for what it described as "unjust profits" to low income energy assistance programs in Arizona, California, Oregon and Washington.
The allegations will mark a fresh blow to the scandal-shaken bank, whose new chief executive, Antony Jenkins, has made a point of saying that ethics matter as much to Barclays as the bottom line. The lender has faced a string of scandals costing it billions of pounds (dollars), and was fined by regulators in the U.S. and Britain for manipulating the London interbank offered rate, or LIBOR, the benchmark for trillions of dollars in loans — including some home mortgages.
Investors did not seem worried, however, with Barclays' share price trading up 0.9 per cent at 311 pence on Wednesday.
The statement by U.S. regulators said that Barclays and the four traders — Daniel Brin, Scott Connelly, Karen Levine and Ryan Smith — took part in an "affirmative, co-ordinated and intentional effort to carry out a manipulative scheme."
Regulators said the fines stemmed from "the seriousness of the violations and the lack of any effort by Barclays and the traders to remedy their violations."
Barclays contests what it described as a one-sided statement, arguing that it strongly disagreed with a FERC assessment "that does not reflect a balanced and full description of the facts or the applicable legal standard."
"We intend to vigorously defend this matter," the bank said in a statement Tuesday.
FERC gave Barclays 30 days to pay the penalties.
If the bank declines to pay the fine, FERC said it could "seek affirmation," from a federal district court.
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