Ofgem fines Engie Global Markets for failing to detect market manipulation


Ofgem has fined Engie Global Markets (EGM) approximately £2.1 million. An investigation found that EGM, acting through a trader working in the name and on behalf of EGM, had manipulated wholesale gas prices to increase trading profits.

In November 2016, a market participant alerted Ofgem to suspicious activity on the wholesale gas market for Great Britain. An investigation found that EGM had engaged in a type of market manipulation called ‘spoofing’ over a three month period between June and August 2016.

‘Spoofing’ involves manipulating prices by placing bids or offers to trade with no intention of executing those bids or offers in order to buy or sell at a higher or lower price and increase trading 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 REMIT. The investigation found no evidence of more widespread market manipulation on the part of EGM. REMIT allows energy regulators to protect wholesale energy markets from market abuse that may distort the price consumers pay for their energy.

Ofgem considers that the company failed to take appropriate measures to prevent or detect the breach from happening. While it noted that EGM did have some measures in place, they were inadequate at the time to detect and prevent the breaches of REMIT. Since August 2016, the company has taken measures to help prevent this happening again. By settling this investigation early, EGM qualified for a 30% discount for early settlement from the proposed approximate £3 million penalty.


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