[ by Melanie Gretchen ]

FERC issued $488 million in penalties against Barclays and 4 former traders and pronounced the amounts "reasonable and appropriate."  It's not as if the regulator - Federal Energy Regulatory Commission - didn't give the respondents an opportunity to plead their case.

The traders engaged in a “three-part manipulative scheme” to game the markets, FERC staff said in a filing yesterday, which was posted to the agency’s website today.   “Neither Barclays nor its individual traders are able to offer any credible explanation to show their conduct was proper,” it said, adding that the proposed penalties are “reasonable and appropriate.”
 

FERC's sanctions marked the largest ever proposed by the regulator for alleged market violations.  The grand total was allocated among the respondents, as follows:

• $435 million civil penalty.
• $34.9 million return of profits.  and,
• $18 million assessed against 4 former traders.  Following the bank's rejection, the agency had a deadline of yesterday to respond.

"Barclays’ manipulative trading scheme cost other market participants at least $139.3 million," staff said.  Barclays’ traders took losses of about $4.1 million in energy markets while making gains of $34.9 million in financial markets, according to the filing.  In its defense, the London- based bank has denied any wrongdoing and has vowed to take the dispute to court.

Barclays Response.   According to a bank spokesperson:   “We believe that our trading was legitimate and in compliance with applicable law.”   The spokesperson added that tje  FERC should throw out the proposed penalties and end the investigation.
 

For further details, go to [Bloomberg, 1/29/13].