yep, the good old boys at the banks were at it again
WASHINGTON/NEW YORK (Reuters) - U.S. regulators threatened to fine Barclays roughly $470 million to settle allegations that the bank and four traders manipulated California electricity markets, reviving the specter of a sector-wide crackdown on energy trading.
It could possibly be the biggest penalty ever levied by the Federal Energy Regulatory Commission (FERC), and potentially exceeds the fine Barclays paid over the Libor bid-rigging scandal that cost Chief Executive Robert Diamond his job.
The bank has 30 days to show why it should not be penalized for an alleged scheme of manipulating physical electricity prices at a loss in order to make profits in related positions in the swaps market, a strategy known as a "loss-leader".
British bank Barclays said it would fight the agency, likely setting up a landmark legal battle that could set a precedent over whether the once-common trading ploy in commodity markets is illegal or simply ill-advised.
It will have huge implications across the market, as the FERC -- which won expanded powers to tackle manipulation in 2005 after the California power trading scandal and related Enron meltdown -- pursues similar investigations against companies including BP and Deutsche Bank.
http://finance.yahoo.com/news/u-power-market-watchdog-seeks-014623684.html
WASHINGTON/NEW YORK (Reuters) - U.S. regulators threatened to fine Barclays roughly $470 million to settle allegations that the bank and four traders manipulated California electricity markets, reviving the specter of a sector-wide crackdown on energy trading.
It could possibly be the biggest penalty ever levied by the Federal Energy Regulatory Commission (FERC), and potentially exceeds the fine Barclays paid over the Libor bid-rigging scandal that cost Chief Executive Robert Diamond his job.
The bank has 30 days to show why it should not be penalized for an alleged scheme of manipulating physical electricity prices at a loss in order to make profits in related positions in the swaps market, a strategy known as a "loss-leader".
British bank Barclays said it would fight the agency, likely setting up a landmark legal battle that could set a precedent over whether the once-common trading ploy in commodity markets is illegal or simply ill-advised.
It will have huge implications across the market, as the FERC -- which won expanded powers to tackle manipulation in 2005 after the California power trading scandal and related Enron meltdown -- pursues similar investigations against companies including BP and Deutsche Bank.
http://finance.yahoo.com/news/u-power-market-watchdog-seeks-014623684.html