Judge orders JPMorgan to explain withholding emails

Fri Jul 6, 2012 7:31am EDT

The lobby of JP Morgan headquarters is photographed through a window in New York May 22, 2012. REUTERS/Eduardo Munoz

The lobby of JP Morgan headquarters is photographed through a window in New York May 22, 2012.

Credit: Reuters/Eduardo Munoz

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(Reuters) - A U.S. judge has ordered JPMorgan Chase & Co to explain why the court should not force the bank to turn over 25 internal emails demanded as part of an investigation into whether it manipulated electricity markets in California and the Midwest.

The Federal Energy Regulatory Commission (FERC) filed a petition in federal court in Washington on Monday asking the court to order the bank to show cause as to why it would not comply with a subpoena issued by the commission as part of its investigation into the bank's power trading.

On Thursday, U.S. District Judge Colleen Kollar-Kotelly gave the bank until July 13 to submit an explanation as to why the court should not enforce FERC's subpoenas. JPMorgan has asserted the emails are protected by the attorney-client privilege.

JPMorgan did not immediately respond to a request for comment.

The FERC tangle threatens to become another dent in JPMorgan Chairman Jamie Dimon's once sterling reputation, although the real cost is almost certain to be negligible compared to the bank's disastrous "London Whale" derivative trades that may cost it $4 billion to $6 billion. However, if the agency presses ahead with a formal enforcement effort it may deepen the damage by evoking memories of the California power trading scandals a decade ago.

FERC has recently stepped up its efforts to end manipulation of U.S. power markets, and news of the subpoena followed a series of more advanced probes of other big Wall Street banks and a record $245 million penalty against Constellation Energy.

(Reporting By Erin Geiger Smith and Jonathan Leff; Editing by Richard Chang)

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Comments (8)
Harry079 wrote:
Judge orders JPMorgan to explain withholding emails
Comments (5)

mulholland wrote:
Manipulating the market again.

Jul 05, 2012 8:40pm EDT — Report as abuse

neahkahnie wrote:
“Well, Judge, I’ll tell you. We just don’t think you should see them. We feel it’s none of your business. Executive Privilege you know.”

Jul 05, 2012 8:53pm EDT — Report as abuse

neahkahnie wrote:
“Who do you think we are? Enron?”

Jul 05, 2012 8:53pm EDT — Report as abuse

Harry079 wrote:
“They’re are taking the Hobbits to Isengard!”

Jul 05, 2012 10:26pm EDT — Report as abuse

libertadormg wrote:
This story evokes bad memories of Enron to me. With all the collusion being reported lately a la Chesapeake, Barclays, et al, it’s as if there is a corporate crime wave going on today.

Jul 05, 2012 11:33pm EDT — Report as abuse

Jul 05, 2012 12:50am EDT  --  Report as abuse
Minarchian wrote:
Why should they have to submit the emails?

DOJ Holder doesn’t have to turn over everything Congress itself demands.

Jul 05, 2012 12:50am EDT  --  Report as abuse
mulholland wrote:
Bankers don’t take risks. They trade on inside information and stock price manipulation. They gamble with their customers’ money. They never have enough cash to pay what they owe. Crooked as a dog’s hind leg is their business model.

Jul 06, 2012 5:39am EDT  --  Report as abuse
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