Barclays 2012 Annual Report Download - page 287

The strategic report Governance Risk review Financial review Financial statements Risk management Shareholder information
30 Competition and regulatory matters continued
In addition to a $200m civil monetary penalty, the CFTC Order requires Barclays to cease and desist from further violations of specified provisions
of the Commodity Exchange Act and take specified steps to ensure the integrity and reliability of its benchmark interest rate submissions,
including LIBOR and EURIBOR, and improve related internal controls. Amongst other things, the CFTC Order requires Barclays to:
 Make its submissions based on certain specified factors, with Barclays transactions being given the greatest weight, subject to certain specified
adjustments and considerations;
 Implement firewalls to prevent improper communications including between traders and submitters;
 Prepare and retain certain documents concerning submissions and retain relevant communications;
 Implement auditing, monitoring and training measures concerning its submissions and related processes;
 Make regular reports to the CFTC concerning compliance with the terms of the CFTC Order;
 Use best efforts to encourage the development of rigorous standards for benchmark interest rates; and
 Continue to cooperate with the CFTC’s ongoing investigation of benchmark interest rates.
As part of the NPA, Barclays agreed to pay a $160m penalty. In addition, the DOJ agreed not to prosecute Barclays for any crimes (except for
criminal tax violations, as to which the DOJ cannot and does not make any agreement) related to Barclays submissions of benchmark interest
rates, including LIBOR and EURIBOR, contingent upon Barclays satisfaction of specified obligations under the NPA. In particular, under the NPA,
Barclays agreed for a period of two years from 26 June 2012, amongst other things, to:
 Commit no United States crime whatsoever;
 Truthfully and completely disclose non-privileged information with respect to the activities of Barclays, its officers and employees, and others
concerning all matters about which the DOJ inquires of it, which information can be used for any purpose, except as otherwise limited in
the NPA;
 Bring to the DOJ’s attention all potentially criminal conduct by Barclays or any of its employees that relates to fraud or violations of the laws
governing securities and commodities markets; and
 Bring to the DOJ’s attention all criminal or regulatory investigations, administrative proceedings or civil actions brought by any governmental
authority in the United States by or against Barclays or its employees that alleges fraud or violations of the laws governing securities and
commodities markets.
Barclays also agreed to cooperate with the DOJ and other government authorities in the United States in connection with any investigation or
prosecution arising out of the conduct described in the NPA, which commitment shall remain in force until all such investigations and
prosecutions are concluded. Barclays also continues to cooperate with the other ongoing investigations.
It is not practicable to provide an estimate of the financial impact of these matters or what effect, if any, that the matters might have upon
operating results, cash flows or Barclays financial position in any particular period.
For a discussion of litigation arising in connection with the Investigations see note 29.
Interest Rate Hedging Products
See Note 27.
FERC Investigation
The United States Federal Energy Regulatory Commission (the FERC) Office of Enforcement investigated Barclays power trading in the western US
with respect to the period from late 2006 through 2008. On 31 October 2012, the FERC issued a public Order to Show Cause and Notice of
Proposed Penalties (Order and Notice) against Barclays Bank PLC in relation to this matter. In the Order and Notice the FERC asserts that Barclays
Bank PLC violated the FERC’s Anti-Manipulation Rule by manipulating the electricity markets in and around California from November 2006 to
December 2008. The FERC is proposing that Barclays Bank PLC pay a $435m civil penalty and disgorge an additional $34.9m of profits plus
interest. Barclays intends to defend this matter vigorously.
Other Regulatory Investigations
The FSA and the Serious Fraud Office are both investigating certain commercial agreements between Barclays and Qatari interests and whether
these may have related to Barclays capital raisings in June and November 2008. The FSA investigation involves four current and former senior
employees including Chris Lucas, Group Finance Director, as well as Barclays. The FSA enforcement investigation began in July 2012 and the
Serious Fraud Office commenced its investigation in August 2012.
In October 2012 Barclays was informed by the US Department of Justice and the US Securities and Exchange Commission that they had
commenced an investigation into whether the Group’s relationships with third parties who assist Barclays to win or retain business are compliant
with the United States Foreign Corrupt Practices Act.
Barclays is co-operating with all the authorities fully. It is not possible to estimate the financial impact upon Barclays should any adverse findings
be made.
barclays.com/annualreport Barclays PLC Annual Report 2012 I 285