Barclays: US $470m energy fine 'unjustified'

Barclays has said US regulators' proposed fines of $470m (£291m) for the bank's alleged manipulation of energy markets are "unjustified" and the allegations will not stand up in court.

The Federal Energy Regulatory Commission (Ferc) has accused four Barclays traders of manipulating power prices in the US from 2006-2008.

Barclays denies the charges.

In a filing on Friday, the bank said Ferc's allegations were "based on an economically irrational theory".

The Office of Enforcement (OE), a branch of Ferc, allege the team of four traders exchanged messages explaining how they would use certain trades in one market to profit in another.

The traders are alleged to have manipulated power prices to make money with their financial swap positions, causing losses for rival power traders of $139m and winning the bank $34.9m.

But Barclays said: "The underlying allegations are inconsistent with the facts and incorrectly rely on erroneous inferences drawn from mere fragments of documents.

"The investigative record, when read carefully and objectively, is plainly insufficient to establish each element of a violation of the Anti-Manipulation Rule by a preponderance of the evidence - the evidentiary standard the Commission will be required to meet in federal district court."

The bank went on: "OE's claims ring even more hollow because they are not accompanied by any explanation as to how OE arrived at its overstated and unjustified claims of disgorgement and civil penalties for Barclays.

"For these reasons, the Commission should terminate this proceeding without any further action."

Barclays' reputation has been hit by a series of scandals in recent months.

In June, it was fined £290m by UK and US regulators for attempting to manipulate Libor, an interbank lending rate which affects mortgages and loans.

In August, the Serious Fraud Office started an investigation into payments between Barclays' bank and Qatar Holding in 2008 when the bank was raising money in the Middle East during the banking crisis.

In the UK Barclays has also been part of the industry wide mis-selling of payment protection insurance (PPI) to individuals and the mis-selling of specialist insurance - called interest rate swaps - to small businesses.