Barclays has said the U.S. Federal Energy Regulatory Commission’s record $470m in proposed penalties against the bank for alleged power-market manipulation are unjustified and won’t withstand a court challenge.
Bloomberg reports that n filings Friday with the FERC, Barclays and four of its former traders denied the commission’s charge that they gamed electricity markets in the Western U.S. from late 2006 to 2008 and vowed to fight the allegations in federal court.
The FERC’s allegations are 'based on an economically irrational theory', London-based Barclays said in its 40-page filing. 'The commission should terminate this proceeding without any further action'.
When the FERC made the charges against Barclays on October 31st, it called for $18m in penalties on four of its former traders. The bank’s challenge may test the commission’s enforcement powers, which Congress enhanced in 2005 to prevent the type of market manipulation that triggered blackouts in California earlier in the decade.
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