Barclays sued for $850m over alleged copper market abuse

A US HEDGE fund run by a Conservative Party donor known as “Mr Copper” is suing Barclays for at least $850m (£645m) for alleged market abuse.

Red Kite, co-founded by Michael Farmer, the former Tory Party treasurer and peer, is claiming losses related to alleged manipulation of the copper market for three years up until 2013.

The suit from the $2bn fund is the latest legal action to hit Barclays, which is fighting separate actions related to funding it received from Qatar after the financial crisis. Barclays has also had to stomach large fines for manipulating the interest rates benchmark Libor.

Red Kite is the world’s largest metals hedge fund. It alleges Barclays allowed staff to share confidential information about its positions with traders at the London Metal Exchange, enabling the bank to profit by placing opposing bets, according to court papers seen by Bloomberg.

Barclays is defending the Red Kite case and says it did not mishandle confidential information. The bank declined to comment further.

Mr Farmer donated £2.3m to the Conservatives in the lead up to the 2010 general election. Barclays is set to post third-quarter results next week, with investors likely to pore over whether or not its underperforming investment banking division has upped its game.