Share
0
Facebook
0
LinkedIn
0
Twitter
0
GooglePlus
0
Reddit
0
StumbleUpon
Loading, please wait

FERC Accuses Barclays of Manipulating US Energy Markets

By James Burgess
Posted on Wed, 13 February 2013 22:45 | 0

The U.S. Federal Energy Regulatory Commission (FERC) is using instant messaging banter between traders to build a case that proves that Barclays Plc (BARC.L) manipulated the US energy markets from 2006 to 2008, costing other market investors over $139.3 million.

The FERC claims that Scott Connelly, a veteran trader who joined Barclays in 2006 as head of its North American trading desk, recruited former colleagues Ryan Smith, Daniel Brin, and Karen Levine and then schemed with them to devise manners to illegally influence the markets.

Electronic chats between the traders are being used as part of the case; including messages such as, “I just started lifting the piss out of the Palo,” Ryan Smith boasted to his colleagues after he falsely raised the price on an energy hub near to Palo Verde in Arizona, claiming that his actions had “f***ed” the market.

Related article: US Bancorp Hits Renewable Energy Market Running

Craig Pirrong, the director of the Global Energy Management Institute at the University of Houston, explained that “traders are typically their own worst enemy. Sometimes they’re just shooting off their mouths.” In other words, sometimes the boasts are nothing more than macho bragging, and heavily over exaggerated from the factual truth. Barclays lawyers are certainly taking this tact, stating that the baseless case has been built on cherry picked messages which don’t even line up against the market data.

It would not be the first time that Barclays has illegally manipulated the markets. In July 2012 the CEO Bob Diamond stepped down and Barclays was fined $455 million after the bank was accused of rigging the London interbank offered rate (Libor).

If found guilty the FERC has the authority to impose fines of up to $1 million per violation per day.

By. James Burgess of Oilprice.com


Join the discussion

Special Reports

8 Mega Trends

8 Mega Trends

By Oil & Energy Insider Analysts

8 OIL & GAS INDUSTRY MEGA-TRENDS AND HOW TO PROFIT FROM THEM
Here's what our 400 global energy assets are telling us to be prepared for right now...

LNG Technology

LNG Technology

By Oil & Energy Insider Analysts

THE "FLOATING REFINERY" STOCK THAT COULD FUND YOUR RETIREMENT
This company's incredible tanker technology could eliminate many of the world's offshore pipelines...

Subsea Production

Subsea Production

By Oil & Energy Insider Analysts

THE END OF OFFSHORE DRILLING?
This disruptive market will grow 84% to 270% over the next five years: Discover the 6 equipment suppliers set to profit.

Be the first to comment on this article.