Details of Barclays' fight with the U.S. energy regulator over alleged power market manipulation will be made public now that officials have rejected the investment bank's claim the probe is a publicity stunt.
Barclays Plc had said the Federal Regulatory Energy Commission was pursuing a case against the bank "to garner additional publicity for its own enforcement activities while seeking to portray Barclays negatively," according to an August filing from the bank that has just been made public.
The regulator found that Barclays manipulated the California power market from late 2006 to 2008 and should pay $470 million in fines.
According to the FERC, the British bank and four of its traders used losses in physical markets to make gains in financial markets and they knew their activity was unlawful.
Barclays has challenged the regulator's finding in a series of filings and sought "confidential" treatment of some elements of its defense.
Two weeks ago, the FERC rejected Barclays bid for confidentiality and about a dozen briefs were made public on the regulator's website late on Monday.
The battle over the record fine is becoming a test of the FERC's authority to protect consumers and investors from wrongdoing in energy markets.
Among other things, the FERC investigation uncovered trader banter that the British bank has termed "unfortunate." The four traders boasted in emails and instant messages about how "fun" it was to "crap on" physical power prices on the West Coast.
Bank defenders argue that more trades add healthy liquidity to the market and are in the interests of consumers.
Congress in 2005 expanded the FERC's powers in the wake of the Enron electricity manipulation scandals in the western United States earlier in the decade.
If Barclays continues to fight and there is no settlement, the dispute is expected to land in federal court.
Officials at Barclays declined to comment.
Barclays was last year fined about $450 million for rigging a key benchmark lending rate.
(Reporting By Patrick Rucker; Scott DiSavino and David Sheppard contributed from New York)