U.S. regulators fine Barclays for energy price manipulation
People walk past a Barclays logo at the bank's headquarters in Canary Wharf in east London, on July 3, 2012.
British banking giant Barclays has been hit with another massive fine by U.S. regulators. Last year, the bank had to cough up around $430 million for rigging interest rates. Now the bank has been fined over $450 million for allegedly manipulating U.S. electricity prices.
The American regulator, the Federal Energy Regulatory Commission, claims Barclays traders bought and sold contracts to supply power in the U.S. with one aim in mind: to influence a key energy price index. Barclays, it’s alleged, then profited by betting on movements in that index.
The bank vehemently denies it has done anything wrong and says it will go to court to overturn the penalty.
David Buik, of stockbrokers Panmure Gordon, says this case has added to the perception in Britain that U.S. regulators only pick on non-American banks.
“There is a huge feeling that there’s been a massive level of discrimination against UK financial institutions,” he says. Buik points out only three banks have been fined over the interest rate rigging scandal; two are British and one is Swiss.
But it’s been reported that, in the case of alleged electricity price rigging, an American bank, JPMorgan, could also be fined.