JP Morgan Chase accused of manipulating power prices
The financial services giant may pay a fine of around $400m to settle the case.
The US Federal Energy Regulatory Commission (FERC) in an enforcement notice formally accused JPMorgan Chase of manipulating power prices by employing improper trading strategies in California and the Midwest in 2010 and 2011.
According to the commission, the bank deployed strategies to extract excessive payments from the agencies that operate the power grids in these regions.
The regulator in the notice said that the bank’s traders had engaged in eight manipulative bidding strategies that generated “tens of millions of dollars at rates far above market prices in 2010 and 2011”, reported the Financial Times.
The notice from the US energy-market regulator is considered to be a formality before the settlement deal with the bank.
The settlement deal is expected to happen this week. JPMorgan Chase may pay a fine of around $400m to end the investigation and the settlement may include other payments, reported Reuters citing reports and an industry source.
Earlier this month, the regulator ordered Barclays Bank and four of its traders to pay $453m in civil penalties for manipulating electric energy prices in California and other western markets between November 2006 and December 2008.