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| Above (click to enlarge), the Barclays subway station as we'd like to see it, with a poster quoting Tuesday's New York Times article |
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| "Heavy Scrutiny article in DealBook column- In background is HSBC Bank criminal money laundering article |
HEAVY SCRUTINY Barclays seems to be facing the wrath of several regulatory agencies in the United States according to White Collar Watch. Four months after reaching a $453 million settlement with regulators over manipulating the London interbank offered rate, or Libor, the Federal Energy Regulatory Commission is seeking a $435 million civil penalty over accusations that the bank manipulated energy prices. The bank has also disclosed that regulators are examining whether payments related to raising capital from investors in the Middle East during the height of the financial crisis violated the Foreign Corrupt Practices Act.The DealBook Online column alerts readers of the print edition to articles that can read in the online edition of the Times. The full online article can be found here: A Triple Whammy for Barclays, by Peter J. Henning, November 5, 2012.
Going back just a few days the Times ran three other articles on Barclays' most recent additional reputational woes during the preceding week, an October 31 article about how with the addition of the two new investigations Barcalys has suffered losses and its shares are declining and, on November 1st, another pair of overlapping articles (with conflicting information about possible fines for Barclays?) about the energy market manipulation. See below and click on the links for further information:
• Facing New Legal Worry, Barclays Reports a Loss, by Mark Scott (“The British bank Barclays faces more legal trouble after disclosing two new investigations by American authorities, clouding already weak ...”) Excerpts below:If you go back a few days more to October 18th you come across another article about more improper behavior by Barclays separate and apart from these other three focused upon scandals, how the bank is having to set aside “an additional £700 million ($1.1 billion) related to the inappropriate sales of insurance to British customers.” (See: Barclays Sets Aside $1.1 Billion More for Insurance Claims, by Mark Scott.)
The British bank Barclays disclosed on Wednesday that it faced two new investigations by American authorities, including one examining whether the company had violated anticorruption laws in its capital-raising efforts during the financial crisis. The news further hurt the share price as the bank reported weak third-quarter results.• The Latest Headache at Barclays, by William Alden (“Barclays faces accusations that it manipulated California energy markets.”) Excerpt below:
The new joint investigation from the Justice Department and the Securities and Exchange Commission on the bank’s capital-raising efforts follows similar efforts by British regulators. The Federal Energy Regulatory Commission is also investigating the past energy trading activity in the bank’s American operations. The commission’s staff on Wednesday recommended taking action against the bank and levying a $470 million fine.
Federal regulators are seeking $469.9 million in penalties from the bank, and $18 million from four former traders.• How Barclays Allegedly Took Losses to Make Bigger Gains, by Peter Eavis (“In outlining its accusations of market manipulation, the Federal Energy Regulatory Commission contends that Barclays traders were prepared ...” ) Excerpts below:
Regulators, relying on e-mail evidence, claim that four traders at Barclays manipulated energy prices to profit on swap contracts. One trader said a particular strategy was “fun,” while another said he was “trying to drive price” in his swap bet, according to messages cited by Reuters.
In an order filed on Wednesday against Barclays, the commission says some of the bank’s energy traders manipulated electricity prices from the end of 2006 to the end of 2008. In a regulatory order, the commission is demanding Barclays pay a $435 million penalty and disgorge an additional $35 million.
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The commission lays out how it thinks the alleged manipulation worked. It says Barclays put on trades that were intended to skew the prices for electricity in what the industry calls the physical market. Those allegedly skewed prices then affected the value of other bets on electricity prices, in the so-called financial market.
The Barclays traders, the commission says, were prepared to take losses in the physical market to move the prices of electricity there.
The physical bets were “not intended to get the best price on those transactions and was not in response to supply and demand fundamentals in the market,” the commission wrote in its order.
Those allegedly manipulated prices lifted the value of the financial bets Barclays had placed, according to the commission. It also argues that the gains in the financial bets were greater than the losses on the physical trades, effectively leaving Barclays with an overall profit during the period when the manipulation is alleged to have occurred.
The article concludes:
In the wake of a number of banking scandals, British politicians are examining ways to improve the culture inside the country’s financial services sector. A parliamentary commission is expected to offer suggestions for new legislation by the end of the year.
With all this new material, the guerrilla political street artists who are stealthily modifying the MTA’s Barclays branded subway pillars to say things like: “Barclays always has the best fixed rates” and other interesting variations of criticism of the bank are going to have to crank out new editions of their work if they are going to keep pace in educating the subway-riding populace about what they need to know about the multiplying misdeeds of Barclays.Notwithstanding that the real news about Barclays Bank is universally very negative right now, if you go to the Times site and do searches for “Barclays” you will find that the bank's name is busily being burnished at the Times site, see images below (click to enlarge). Searches for “Barclays” pull up listed article results that are preceded by paid advertisements for Barclays Bank. The listed articles themselves are mostly reflective of all the practically full-out positive hype the Times has been giving the opening of the “Barclays” arena including silly and biased Bloomberg administration-assisted stories (at the top of the list) like how the arena is bringing more yellow cabs to Brooklyn (not mentioning the failure to properly handle the black car problems brought to the area by the arena.
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| "Barclays" search- no date limitation |
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| "Barclays" search for last 7 days |
The Times has basically buried the scandal about how the MTA gave away the right to brand Brooklyn subway hubs with the name of the bank, never adequately explaining to the public that those rights were given away by the MTA virtually for free. Glaringly, the Times has only three times mentioned the anomaly of devoting vastly valuable public resources and assets to subsidize the promotion of such a questionable bank. I’ve suggested that the mention of this anomaly should be almost routine in the many articles the Times runs effectively hyping the bank’s name. Instead, those articles, like the direct advertising from Barclays you see on the Times site; never mention or hint at the awkwardness.
Norman Oder has these two articles available that provide much assessment focused on the Times recent hyping of the arena while its coverage of the related real significant news events languishes: (City Journal) The Barclays Center’s Media Enabler: From the start, the New York Times was reluctant to challenge Brooklyn’s new arena, November 6, 2012 and (Atlantic Yards Report) Wednesday, November 07, 2012, My City Journal essay on the New York Times's record covering Atlantic Yards: "The Barclays Center's Media Enabler".
Concludes Mr. Oder in the first of those two articles:
“You’re not buying news when you buy the New York Times,” the late publisher Arthur Ochs Sulzberger once said. “You’re buying judgment.” When it comes to Atlantic Yards, you’re not getting enough.Having one's bank's name on Brooklyn subway hub stations is not a guarantee of good advertising 100% of the time. Monday around rush hour, just after 5:00 PM, I was headed back to Brooklyn from Manhattan’s West Village on the subway when I was subjected to the following announcement: “Because of an investigation at Barclays the following trains are not running to Brooklyn, 2, 3, 4 and 5.” Given that the superstorm Hurricane Sandy had still shut down many other lines (the N, R Q, W etc.) the announcement suggested that the one way to get to Brooklyn that evening was to take the D train. Downtown 2 and 3 trains were being taken out of service when they reached 14th Street.
I took the number 1 train down to its current last stop at Chambers Street and walked across the bridge. On my long walk home I couldn’t help thinking how appropriate investigations of “Barclays,” in fact, would be, including investigation of the political confections between the developer/subsidy collectors for the “Barclays” arena and the Atlantic Yards mega-monopoly, which the arena spearheads. Unfortunately, I knew that the investigation going on at Barclays that evening didn’t involve our local politicians ( Mayor Bloomberg, Brooklyn Borough President Markowitz, MTA and ESD Officials, etc) and Bruce Ratner and Mikhail Prokhorov. We can hope that they do in the future.
Meanwhile, until we rename the “Barclays” arena and Brooklyn’s subway hubs now christened “Barclays” some other name more appropriate than “Barclays,” negative incidents like that evening’s bad commuting news will be outweighed buy all the positive hype from Times and those constant reminders on the subway as you hear (or see) the publicly paid-for promotions of the nefarious Bank with announcements like, “Next stop, Barclays Center.”
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| Once more (click to enlarge) the poster we'd like to see in the Barclays subway stations |
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