Barclays will contest a record $453 million (297.86 million pounds) fine imposed by a U.S. energy regulator against the British bank and four of its power traders, setting up a likely federal court battle.
The fines, which were upheld by the Federal Energy Regulatory Commission (FERC) on Tuesday, confirm the top U.S. energy cop will pursue its most ambitious market manipulation case to date.
For Barclays, the sanction is the latest of a series of scandals that include a $450 million fine by U.S. and UK regulators for rigging global benchmark interest rates last year. But unlike its settlement over Libor (London Interbank Offered Rate), where the bank accepted wrongdoing, it has fought the FERC allegations from the start.
FERC first proposed the fines in October 2012 over alleged manipulation of Californian and other western power markets by the British bank in the last decade.
Tuesday's ruling said FERC commissioners agreed with earlier findings by regulatory staff, which said the bank deliberately lost money in physical power markets to benefit its financial positions between 2006 and 2008, and that the Barclays traders knew their activity was unlawful.
(Read More: Barclays CEO: We Aren't at Odds With Regulators)
"FERC finds that their actions demonstrate an affirmative, coordinated and intentional effort to carry out a manipulative scheme, in violation of the Federal Power Act and FERC's Anti-Manipulation Rule," the regulator said in a statement.
The case will likely now move to a federal court.
"We have cooperated fully with the FERC investigation, which relates to trading activity that occurred several years ago," Barclays spokesman Marc Hazelton said in a statement on Tuesday. "We intend to vigorously defend this matter."
Barclays Chief Executive Antony Jenkins, who took the helm last year, is trying to rebuild the bank's battered reputation and repair testy relationships with regulators.
One of his first moves was to tackle the investment banking business criticized for a free-wheeling culture and accused of paying staff too much.
Jenkins said in April he wanted his bank "to become a model of constructive engagement with regulators", but has admitted turning the bank around could take at least five years.
Barclays shares were down 0.7 percent at 306.1 pence by 1004 GMT, in line with a slightly lower European banking index.