Barclays PLC (LON:BARC) denied all the charges framed against them by the United States Federal energy Regulatory Commission. FERC has recorded a $470 million as penalties against the bank and have alleged them for manipulation in the power market. The bank however, is confident that all these charges will prove wrong and cannot withstand court.
In yesterday’s proceeding Barclays PLC (LON:BARC) and four former traders of the bank refused all the charges. FERC filed a case saying that the bank and traders have played with electricity markets of Western U.S. since late 2006 until 2008. Barclays PLC (LON:BARC) including the trader company vowed to fight the case and prove all allegations as false.
As per the 40-page filing prepared by Barclays PLC (LON:BARC) all the allegations are irrational and have no basis to them and hence, the commission must terminate the case proceedings without any further delay.
On 31st of October, FERC while framing charges against Barclays PLC (LON:BARC) they demanded $18 million as penalties from the four former traders. The congress enhanced FERC’s enforcement powers after the California blackouts which was a result of similar market manipulation over a decade ago. The Bank’s challenge will surely call for the testing of this power. According to the commission, Scott Connelly who is one amongst the four traders came up with a manipulative scheme and agreed to pay $15 million and even an additional $1 million to the remaining three trader colleagues.
The allegation has been declared as false by his lawyers. They quoted in defense that this penalty is unjust and must not be imposed as it will ruin the life of Mr. Connelly and his family’s life, and will bring them down financially as well as mentally. A federal Judge can never enforce such financial death penalties.
The lawyers from the bank side said that Barclays PLC (LON:BARC) did not have any intentions or the capability with which they could manipulate the power markets. They did trading in a legitimate way. In an email, Mark Lane, a Barclays PLC (LON:BARC) spokesman quoted: “decline to assess any penalties and terminate this matter without any further proceedings” and added that if FERC will continue with the proceedings, then they surely will fight back in Federal court. He even appealed that the five member commission must not believe the recommendations of the enforcement staff. FERC Chairman Jon Wellinghoff clarified that the agency is in “full enforcement mode”. Mary O’Driscoll, a FERC spokeswoman, was not available for comment.
Shares of Barclays PLC (LON:BARC) were up by 0.14% to close at £254.46.