FERC investigation revealed Barclays submitted false power transaction data to manipulate price indices. Traders coordinated to move markets and increase profits on derivative positions.
“Barclays reports all energy transactions accurately and does not engage in market manipulation”
From “crazy” to confirmed
The Claim Is Made
This is the moment they called it crazy.
In the years following the 2008 financial crisis, regulators were supposed to be watching markets more closely. Yet at Barclays, one of the world's largest financial institutions, traders were quietly submitting false data to manipulate energy prices—and profiting handsomely from the deception.
The claim surfaced within trading communities and regulatory circles: Barclays traders had systematically submitted false power transaction reports to manipulate energy price indices that affected billions of dollars in derivative contracts. These index prices weren't academic exercises. They determined what companies and utilities paid for electricity across North America. When those prices moved, traders holding the right derivative positions could pocket millions.
Initially, like most accusations against major financial institutions, this was dismissed. Barclays representatives maintained that their trading practices were within acceptable bounds and that any discrepancies in reporting were technical matters, not intentional manipulation. The company suggested critics misunderstood the complexity of energy markets and how price indices were calculated. This is a familiar refrain in finance: complexity as cover.
But the Federal Energy Regulatory Commission didn't accept that explanation. FERC investigators conducted a detailed probe into Barclays' energy trading operations and uncovered exactly what was claimed. The traders had deliberately submitted false or misleading power transaction data designed to move the widely-used energy price indices—specifically indices that directly benefited their derivative positions.
The coordination was key. This wasn't a rogue trader or isolated incident. Multiple traders working across Barclays' operations had engaged in what regulators called "paint the tape" strategies—essentially manufacturing false transaction data to create the impression of market activity that didn't actually occur. The effect was to artificially influence prices in directions profitable to their trading book.
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FERC's findings led to a settlement in which Barclays agreed to pay $453 million in penalties. The company also agreed to accept findings that it had engaged in market manipulation through false reporting—though like most settlements, Barclays neither fully admitted wrongdoing nor completely denied it. That ambiguity is standard practice when major institutions settle with regulators: enough acknowledgment to resolve the matter, enough deniability to preserve reputation.
What makes this case significant extends beyond the specific traders or even Barclays itself. Energy markets sit at the foundation of modern economies. Reliable price discovery—the process by which actual supply and demand determine prices—depends on honest reporting. When major financial institutions falsify transaction data to move prices, they're essentially stealing from everyone participating in those markets.
The broader lesson is structural. These traders weren't operating in some lawless corner. They worked within one of the world's most established financial institutions, with compliance departments and internal controls. Yet the profit motive was strong enough to overcome those safeguards. Only regulatory investigation revealed what had happened.
For observers skeptical of financial institutions, this confirmed a persistent concern: Wall Street operates according to different rules. For those who believed markets were essentially honest, it demonstrated that even post-crisis regulations had significant gaps. The claim that major traders would manipulate energy markets through false data wasn't conspiracy. It was documented fact, exposed only because regulators looked closely enough to find it.
Beat the odds
This had a 0.3% chance of leaking — someone talked anyway.
Conspirators
~50Network
Secret kept
12.8 years
Time to 95% exposure
500+ years
