FERC Orders $453 Million in Penalties for Power Market Manipulation

The Federal Energy Regulatory Commission said in a news release that it ordered Barclays Bank PLC and four of its traders to pay $453 million in civil penalties for, "manipulating electric energy prices in California and other western markets between November 2006 and December 2008."

Per FERC's news release, "FERC also ordered Barclays to disgorge $34.9 million, plus interest, in unjust profits to the Low-Income Home Energy Assistance Programs of Arizona, California, Oregon, and Washington."

FERC's news release said that, in the FERC order, "FERC finds Barclays, Daniel Brin, Scott Connelly, Karen Levine and Ryan Smith built and then flattened substantial monthly physical index positions at four of the then-most liquid trading points in the western United States for the fraudulent purpose of manipulating the index price to benefit Barclays' financial swap positions. FERC finds that their actions demonstrate an affirmative, coordinated and intentional effort to carry out a manipulative scheme, in violation of the Federal Power Act and FERC's Anti-Manipulation Rule."

"Given the seriousness of the violations and the lack of any effort by Barclays and the traders to remedy their violations, FERC ordered Barclays to pay $435 million in penalties; Connelly to pay $15 million; and Brin, Levine and Smith to pay $1 million each. The Federal Power Act authorizes penalties for such manipulative acts of up to $1 million per day per violation," FERC said in its news release

Docket No. IN08-8