TIMELINE-US court to review Barclays power manipulation penalties

Oct (HKSE: 3366-OL.HK - news) 2 (Reuters) - A U.S (Other OTC: UBGXF - news) . federal court on Friday said it would review the U.S. Federal Energy Regulatory Commission's (FERC) proposed $435 million civil penalty against Barclays Plc (LSE: BARC.L - news) for alleged power market manipulation from 2006 to 2008.

The U.S. District Court for the Eastern District of California said it will determine if FERC's proposed assessment shall be affirmed, vacated or modified.

Barclays has argued it did nothing wrong and has questioned the size of the penalty, which is the most sought by FERC since the Energy Policy Act of 2005 expanded the regulator's penalty authority.

In addition, the court decided to separate its determination of disgorgement from its review of the civil penalty. In addition to the civil penalty, FERC also said Barclays should disgorge $34.9 million plus interest of alleged ill-gotten gains.

Following is a timeline of FERC's Barclays case and the events leading up to it:

1995-2000: States begin deregulating power markets to give customers a choice of supplier. The program was expected to reduce electricity costs. 2000-2001: A power crisis hits California and other Western U.S. states, costing customers up to $45 billion as well as lost economic activity due partly to power and gas market manipulation. December 2001: Enron enters bankruptcy amid an accounting scandal and accusations of power and gas market manipulation. 2001-2003: Numerous energy marketers, such as the former Enron, Mirant, El Paso and Dynegy (NYSE: DYN - news) , exit U.S. power and gas markets due to credit concerns and allegations of market manipulation. August 2003: Blackout leaves 55 million people in the dark in eight U.S. Northeastern and Midwestern states and Ontario in Canada.

June 2004: FERC authorizes Barclays to sell power at market-based prices.

July 2005: In response to the Western energy crisis and the Northeastern blackout, Congress passes Energy Policy Act of 2005, ratcheting up penalties FERC can impose for market manipulation and reliability violations to $1 million per day per violation from the prior cap of $10,000 a day.

October 2005: FERC and the U.S. Commodity Futures Trading Commission (CFTC) agree to work together on market manipulation cases. November 2006: FERC alleges Barclays and four of its traders manipulated the electric market in and around California from November 2006 to December 2008.

Specifically, FERC says Barclays engaged in loss-generating trading of next-day physical power on the IntercontinentalExchange at four Western hubs, Mid-Columbia, Palo Verde, South Path 15 and North Path 15, to benefit Barclays (Swiss: BARC.SW - news) financial swap positions in those markets.

July 2010: CFTC Director of Enforcement sent letter to FERC's Director of Enforcement that FERC was best situated to handle the Barclays case.

October 2012: FERC issues order to Barclays to show cause why it should not be found to have violated the Federal Power Act and pay a civil penalty of $435 million and disgorge $34.9 million plus interest. FERC also issues an order to four Barclays traders to show cause why they should not be assessed penalties totaling $18 million.

July 2013: At Barclays' request, FERC issues an order assessing the civil penalty against the bank and its traders, and institutes an action in federal district court to affirm the penalty. Barclays had the option to choose a hearing before a FERC administrative law judge or seek review by a U.S. district court if the FERC commissioners found a violation.

October 2013: FERC files case against Barclays and its traders in U.S. District Court for the Eastern District of California, requesting a jury trial.

December 2013: Barclays files motion to dismiss the FERC case. Among other contentions, Barclays argued FERC had no standing to pursue the case after the U.S. Court of Appeals in March 2013 dismissed FERC's case against natural gas trader Brian Hunter, finding that the CFTC has exclusive jurisdiction over futures markets.

February 2014: FERC files motion opposed to Barclays' motion to dismiss.

February 2015: Court hears oral argument on Barclays' motion to dismiss.

May 2015: Court dismisses Barclays' motion to dismiss.

Oct 2015: Court orders FERC to file a record of how it assessed civil penalties and to file a motion for an order affirming the civil penalties assessed by FERC.

(Reporting by Scott DiSavino; Editing by Bill Rigby)