British Regulator Fines Engie for Trade Malpractice

GB energy regulator Ofgem has fined French Engie Global Markets (EGM) about £2.1mn ($2.6mn) after an investigation found that a trader at EGM had manipulated prices of a benchmark contract in the summer 2016, it said September 5. By co-operating with the regulator in is investigation, EGM earned a 30% discount, Ofgem said.

Acting on information from a market participant, Ofgem launched in November that year an investigation which found that EGM had placed bids or offers to trade with no intention of trading at those prices, in order to boost profits. 

Ofgem found that a number of bids and offers to trade, concerning a month-ahead natural gas contract on the GB wholesale gas market, were in breach of Article 5 of the regulation on market transparency (Remit). The investigation found no evidence of more widespread market manipulation on the part of EGM. 

While Ofgem notes EGM did have some measures in place, they were inadequate at the time to detect and prevent the breaches of Remit, it said. Since then Engie has tightened its surveillance of its trade floor.

Ofgem CEO Dermot Nolan said the investigation "demonstrates Ofgem’s commitment to monitoring wholesale energy markets in Great Britain and ensuring their integrity on behalf of consumers. Ofgem’s enforcement action under Remit sends a strong signal to all energy market participants that we have the powers to tackle market manipulation wherever we find it – and are ready to use them.”