Barclays boss Jenkins draws line in sand, refuses to pay $470m US fine

The bank apparently intends to fight the hefty fine imposed on it yesterday for alleged manipulation of US electricity prices.

by Andrew Saunders
Last Updated: 16 Sep 2013
The nearly half-billion-dollar fine was doled out by a formerly little-known US regulator called FERC - the Federal Energy Regulatory Commission - as punishment for alleged price manipulation. Yes more price manipulation, this time not of interest rates but of energy prices in California and several other western US states.

If the bank does not pay the fine within 30 days, then FERC will automatically begin the process of bringing the case to court. The kind of bad publicity that most banks - especially those with a history as chequered as Barclays has been recently - are eager to avoid.

But it seems that boss Antony Jenkins - the ‘straight man’ tasked with the job of cleaning up after the scandals of the Bob Diamond era - may have had enough of paying up and looking big.  He has, say insiders, taken a personal interest in the case and supports the hardline view taken by the firm’s lawyers. Barclays today issued a statement saying that it intends to ‘vigorously defend the matter in Federal court.’

It is expected to argue that emails between four former Barclays energy traders - alleged by FERC to be incriminating - are simply examples of traders banter and do not tally with trading records.

Taking on FERC in this way is a high risk strategy - the rattle of skeletons falling out of closets has been an almost weekly occurrence at Barclays Canary Wharf HQ since Jenkins took over last year, and bosses were no doubt hoping that the clatter of jangling bones might be dying down by now.

But on the other hand, simply lying down and taking the punishment for the sake of a quiet life is hardly guaranteed to succeed either. Indeed, given the recent track record of US regulators in going after British firms when they sniff easy money and quick headlines, it’s about time that someone over here decided to stand up to them.

Standard Chartered and HSBC have also had similar run-ins with the US authorities recently, and the ongoing BP mess over compensation for Deepwater Horizon can also be seen as part of the same anti-British trend.

Just to be clear, MT isn’t suggesting that British firms never do bad things, nor that they should not have to suffer the consequences of their actions when they do, be that in the UK, the USA or anywhere else for that matter.

But we do think that a level playing field approach should operate when it comes to pursuing alleged transgressors. Too often it seems to be only the Brits who are consigned to the official US doghouse.

Are their domestic firms really all squeaky clean? Or could it be that our American cousins - despite all their breezy rhetoric about globalisation and the free market - would really rather keep their own back yard to themselves?

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