Ofgem has fined a unit of French utility ENGIE £2.1 million after an investigation found one of its traders manipulated wholesale gas prices.
The regulator said the trader working for ENGIE Global Markets (EGM) was engaged in a type of market manipulation called “spoofing” over a three-month period between June and August 2016.
Spoofing takes place when a trader places bids or offers with no intention of executing them in order to buy or sell at a higher or lower price and increase trading profits.
Ofgem’s investigation found a number of bids and offers to trade, concerning a month-ahead natural gas contract on Britain’s wholesale gas market, were in breach of Article 5 of REMIT.
REMIT gives regulators greater powers to protect wholesale energy markets from market abuse, including manipulation which may distort the price consumers pay for their energy.
Ofgem’s statement said: “Ofgem considers that the company failed to take appropriate measures to prevent or detect the breach from happening. Whilst Ofgem notes EGM did have some measures in place, they were inadequate at the time to detect and prevent the breaches of REMIT.”
It added no evidence of more widespread market manipulation was found on the part of EGM.
An ENGIE spokesperson said: “EGM fully co-operated with Ofgem throughout its investigation and provided authorities with any relevant information they required. EGM operates with the highest standards of risk control, ethics and compliance, and therefore strongly condemns practices that distort the market.
“The company immediately undertook measures to ensure that such practices are detected and not repeated again by reinforcing the implementation of its existing supervising tools which guarantee a constant and rigorous follow-up and audit of energy trading activities.”