Barclays to appeal $453m fine for rigging energy markets
BARCLAYS pledged to challenge US energy regulators in court yesterday after they upheld a record $453m fine imposed on the bank last year for rigging electricity markets in California.
Its defiance came as JP Morgan Chase appeared to move closer to agreeing a record settlement with the US Federal Energy Regulatory Commission (Ferc) over allegations that the US banking giant manipulated electricity markets in California and the Midwest. According to reports in the Wall Street Journal, the bank and regulator, who have been discussing a $1bn settlement, are exchanging drafts of an agreement.
Analysts, however, said yesterday that Barclays would fight Ferc's claims that it rigged the California electricity markets between 2006 and 2008 to the very end.
"This by its very nature a one-sided prosecution document, and it cannot be enforced without reference to the courts," Ian Gordon at Investec said.
"This process should afford Barclays ample scope to present its case. We would expect Barclays to argue that there is no legal basis or precedence for the Ferc fine and that its employees' trading was entirely legitimate and in compliance with the applicable law,"
Barclays said: "We have co-operated fully with the Ferc investigation, which relates to trading activity that occurred several years ago. We intend to vigorously defend this matter."
Barclays has 30 days to pay the Ferc fine or face a court battle.