The U.S. Federal Energy Regulatory Commission correctly found that traders for Barclays had gamed energy markets, agency staff said in a report backing $488m in penalties on the bank and its former traders.
The penalties are 'reasonable and appropriate', FERC staff said in a filing obtained by Bloomberg News. The agency’s staff had a deadline of yesterday to respond to Barclays’rejection of the charges last month.
'Barclays’ manipulative trading scheme cost other market participants at least $139.3m', the staff said. London-based Barclays has denied any wrongdoing and has vowed to take the dispute to court.
The combined penalties are the largest ever proposed by FERC for alleged market violations, and the outcome of the dispute may help clarify what constitutes market manipulation. Barclays said in a December 14th regulatory filing that the FERC staff interpretation is too broad and may chill trading in power markets, where electricity supply is bought and sold.
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image: © Elliot Brown