Barclays Refusing to Pay $470 Million U.S. Penalty
Jul 17th 2013 10:00AM
U.K.-based Barclays PLC (NYSE: BCS) is refusing to pay fines totaling $470 million levied against the bank by the U.S. Federal Energy Regulatory Commission (FERC) related to electricity trading by four former traders who were judged to have manipulated electric power prices in several Western states, including California. The manipulation is alleged to have occurred between November 2006 and December 2008.
In a news release, the FERC has ordered the bank to pay $453 million in fines and to disgorge $34.9 million, plus interest, in "unjust profits." The four former traders have been hit with fines totaling $18 million.
Barclays has 30 days in which to pay the fines, but the bank has already distributed a statement saying that it plans to "vigorously defend" itself in federal court. The inference to be drawn is that Barclays will not pay the fine by the deadline. In that case, by law, the matter will automatically be referred by FERC to the federal courts.
Deutsche Bank A.G. (NYSE: DB) already has agreed to pay a settlement of $1.7 million related to similar charges, and J.P. Morgan Chase & Co. (NYSE: JPM) in May received a notice from the FERC that the agency plans to recommend an enforcement action against the bank and some of the bank's employees. It is not entirely clear that the FERC's action against J.P. Morgan is related to manipulation of the same electricity markets.
Filed under: Banking & Finance Tagged: BCS, DB, JPM