UPDATE 1-Senators question U.S. energy market settlement with JPMorgan

Wed Jul 31, 2013 1:43pm EDT

WASHINGTON, July 31 (Reuters) - Two Democratic Senators on Wednesday asked U.S. energy regulators for more details on how terms of a settlement were reached on alleged power market manipulation in California and the Midwest by a unit of JPMorgan Chase & Co.

In a letter to Jon Wellinghoff, chairman of the Federal Energy Regulatory Commission (FERC), Elizabeth Warren and Edward Markey, both of Massachusetts, questioned whether the settlement announced on Tuesday included "adequate refunds to defrauded ratepayers."

JPMorgan Ventures Energy Corp agreed to disgorge $125 million in profits and pay a civil penalty of $285 million for 12 "manipulative bidding strategies" identified by regulators as having taken place between September 2010 and November 2012.

It was the second largest penalty in FERC's history but, the Senators wrote, "equal to roughly 1.3 percent of JPMorgan's 2012 profits."

Warren and Markey also asked FERC why certain JPMorgan executives accused by FERC "of stiff-arming its investigators by refusing to comply with subpoenas," will not be punished, and why the company was permitted to avoid an admission of guilt.

Craig Cano, a spokesman for FERC, said the commission does not comment on Congressional correspondence but that Wellinghoff would respond to the Senators.

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