FERC Enforcement Staff Alleges Market Manipulation by Barclays Bank PLC

FERC has posted a Staff Notice of Alleged Violations against Barclays Bank PLC and several individual traders.

"[I]n a nonpublic formal investigation pursuant to 18 CFR Part 1b, the staff of the Office of Enforcement of the Federal Energy Regulatory Commission (Commission) has preliminarily determined that Barclays Bank PLC, Daniel Brin, Scott Connelly, Karen Levine, and Ryan Smith each violated the Commission's Prohibition of Electric Energy Market Manipulation, 18 CFR 1c.2 (2011)," the notice alleged.

"Barclays Bank PLC is a global financial institution headquartered in the United Kingdom. Messrs. Brin, Connelly and Smith and Ms. Levine (collectively the individual traders) were employed by Barclays Bank PLC during the relevant time periods as energy traders on its West power desk. Staff alleges that Barclays Bank PLC and the individual traders (collectively Barclays) each violated 18 CFR 1c.2 (2011) by engaging in a coordinated scheme during certain months in the period November 2006 to December 20082 by trading day-ahead fixed-price physical electricity at the locations of Mid- Columbia, Palo Verde, South Path 15 and North Path 15 to benefit Barclays' Intercontinental Exchange (ICE) fixed-for-floating financial swap positions in those markets. Specifically, staff alleges that Barclays assembled substantial physical positions in the opposite direction of Barclays' fixed-for-floating financial swap positions and that Barclays flattened those physical positions in the next-day fixed-price physical markets to move the ICE daily index settlement up if buying and down if selling," the notice alleged.