The free market is meant to benefit society and make the economy more efficient and productive. On the other hand, there are laws that regulate how business is allowed to be conducted in California. These rules and regulations are designed to ensure fairness in the marketplace. However, if a company violates regulatory laws, it can result in a business litigation lawsuit.
This seems to have been the case when a California water utility company filed a lawsuit against Barclays Bank Plc, a banking firm based overseas. The plaintiff filed a class action lawsuit alleging that the defendant banking firm was unfairly manipulating electricity prices. The lawsuit claims that the defendant firm used its energy traders to unreasonably restrain the electricity and electricity-related contracts markets. Barclays has not issued a comment on the issue but has denied electricity market manipulations in the past.
In 2013, the U.S. government fined the banking firm $453 million for electricity price manipulation. The most recent lawsuit against Barclays alleges that the banking firm cost market participants a minimum of $139.3 million from its actions. The court filing accused the bank of acquiring and maintaining monopoly control over daily index prices of four major U.S. trading hubs for approximately two years.
However, the banking firm still has a right to defend itself against the most recent lawsuit filed against it in California. Therefore, the defendant bank will be allowed to present a legal defense against the allegations listed in the business litigation lawsuit. Whether or not the banking firm will prevail will depend upon how well the company backs up its legal argument with evidence and testimony.
Source: Reuters, “Barclays sued by California utility over alleged electric market manipulation“, Lehar Maan and Shivam Srivastav, June 23, 2015
