Barclays faces record $435 million fine over manipulating US electricity markets

After being pulled up and fined in the Libor scandal, British bank Barclays has come under fire from the US government for allegedly manipulating the US electricity markets, and is facing a US anti-corruption probe over potential violations when it raised money from Middle Eastern investors during the global financial crisis of 2008-2009.

The US Federal Energy Regulatory Commission (FERC) yesterday sought a record $435 million fine and a $34.9 million disgorgement payment from Barclays for allegedly manipulating electricity prices in the Western US from 2006 to 2008.

The FERC is also seeking $18 million in penalties from four Barclays traders and ordered the bank to give reasons as to why it should not be penalised.

The fine, if collected, could be the biggest penalty ever levied by the FERC, and would exceed the fine Barclays paid over the Libor bid-rigging scandal.

The London-based bank was fined a record £290 million in August  by the US and British regulators for manipulating the Libor benchmark interest rate. (See: Barclays fined $452 million for Libor, Euribor manipulations)

The FERC alleges that Barclays manipulated physical electricity prices at a loss in order to make profits in related positions in the swaps market