Barclays faces $470 million fine for energy manipulation

London, United Kingdom (4E) – U.S. regulators is threatening to impose a $470m fine to British bank Barclays for allegedly manipulating the California energy markets between 2006 and 2008.

The Federal Energy Regulatory Commission (FERC) announced it is slapping Barclays with a fine of $435m for the offense and a $35m order to disgorge alleged profits.

Barclays has denied the allegation, where if proven guilty the company could end up paying more than it paid over the Libor rate-manipulation scandal. The bank has a 30-day window to contest the charge.

Earlier in the day, the bank issued a warning that it could face a penalty for allegedly manipulating electricity prices in California.

The FERC is investigating the communications made by four traders on the bank’s West Coast power desk.

The four traders – Scott Connelly, Daniel Brin, Ryan Smith and Karen Levine – have allegedly manipulated energy prices to profit with their financial swap positions, resulting to $34.9m in gains for Barclays and losses amounting to $139m for rival traders.

The investigation is yet another embarrassment for the bank, which just three months ago paid a record fine for rigging the interest rate benchmark Libor that resulted to the resignation of its chief executive Bob Diamond.

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