FERC proposes record $435M fine for Barclays energy trades

London-based company has 30 days to respond

Deutsche Bank

The FERC in December issued a preliminary determination that Deutsche Bank’s energy trading unit manipulated the California power market in 2010, which may result in a $1.5 million fine and the loss of $123,198 in profits. The company has until Nov. 5 to respond to the agency’s allegations.

Regulators “have been cracking down on market manipulation whereby companies essentially leverage one market to influence the outcome of another,” Alan Isemonger, founder of Energy Market Expertise LLC, a Sacramento, California-based consulting firm, said in an e-mail.

In the Barclays case, “FERC appears to be certain of the nature of the violation and is moving ahead with profit disgorgement and fines and penalties,” said Isemonger, a former market monitor for California’s power-grid operator.

In addition to the FERC investigation, Barclays said it is is the subject of separate probes by the U.S. Justice Department and Securities and Exchange Commission. The agencies are trying to determine whether third parties who help the bank win business comply with the Foreign Corrupt Practices Act. In June, U.K. and U.S. regulators fined Barclays for manipulating the London interbank offered rate.

Bloomberg News

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