FERC Tuesday ordered Barclays Bank plc and four of its traders to pay $453 million in civil penalties and disgorge $34.9 million, plus interest, in unjust profits for manipulating electric power prices in California and other western markets between November 2006 and December 2008.

While the civil penalties must be paid to the U.S. Treasury within 30 days, the Federal Energy Regulatory Commission said the unjust profits and interest would go to the Low-Income Home Energy Assistance Programs of Arizona, California, Oregon and Washington.

In the order, FERC found that 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. The Commission said the actions demonstrate “an affirmative, coordinated and intentional effort to carry out a manipulative scheme” in violation of the Federal Power Act (FPA) 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 FPA authorizes penalties for such manipulative acts of up to $1 million/day per violation.

These penalties must be paid to the U.S. Treasury within 30 days. Barclays also has 30 days to distribute the unjust profits, with 19% percent going to Arizona, 63% to California and 9% each to Oregon and Washington.

FERC’s action comes after Barclays and the traders opted for a procedure under the FPA in which FERC may assess a penalty without a hearing before an administrative law judge. If Barclays and the traders do not pay the penalties assessed by FERC, then FERC may seek affirmation of the penalties from a federal district court.

©Copyright 2013Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.