Barclays faces potential fine of $100m in US inquiry
THE AMBITION of Barclays’ new chief executive to restore the group’s battered reputation was dealt a fresh blow when it emerged the bank faces a fine of potentially more than $100 million (€77 million) over alleged energy market manipulation.
Barclays vowed to “vigorously defend” itself after disclosing it faced a possible fine by the US Federal Energy Regulatory Commission over power trading in the western US from late 2006 to 2008.
One insider called it a “ludicrously high” figure. The bank, which this summer paid a £290 million (€361 million) fine for manipulating the Libor benchmark interest rate, also disclosed it is being investigated by the US department of justice and the US Securities and Exchange Commission over whether it breached corruption laws.
The US authorities are investigating whether its relationships with third parties who assist it to win or retain business comply with the US Foreign Corrupt Practices Act (FCPA), the bank said.
Potential liability in FCPA investigations is huge: the largest fine paid to settle FCPA allegations was the $800 million (€617 million) paid by Siemens in 2008.
Barclays chief executive Antony Jenkins, who came in this summer with a promise to change the bank’s culture by “embedding a refreshed set of values and behaviours”, said the first investigation did not imply any “wrongdoing”.
He is trying to rebuild the bank’s reputation after a series of scandals including the manipulation of Libor and the mis-selling of payment protection insurance and interest-rate hedging products for small and medium-sized businesses. – Copyright The Financial Times Limited 2012