3 Min Read
NEW YORK, Dec 12 (Reuters) - A six-month electricity trading ban imposed on JPMorgan Chase & Co. by federal energy regulators is "not that big a deal," Chief Executive Jamie Dimon said on Wednesday.
The ban, which will prevent the bank from selling electricity at competitive market rates, is one of the most serious punishments that can be levied by the Federal Energy Regulatory Commission (FERC), the top U.S. power market regulator.
"I'm not worried about it," Dimon said at The New York Times Dealbook Conference in New York. He said the ban would not have an economic impact on the bank.
The ban highlights the increasing scrutiny Wall Street banks are receiving from FERC, which has stepped up its enforcement after a 2005 law that gave it additional powers in the wake of the Enron scandal.
Dimon said JPMorgan would continue to fight the ban, which he said was wrongly imposed. "We think we're entitled to, when they're wrong, to fight it, you know, legitimately. That's what courts are for," he said.
But Dimon, who recently estimated the bank's annual regulation tab at more than $1 billion, seemed resigned to eventually losing the fight.
"My experience in life is that regulators always win anyway," he said.
A spokeswoman for FERC declined comment, citing the agency's policy of not discussing ongoing cases.
Besides JPMorgan, FERC has also charged Barclays Bank Plc and Deutsche Bank AG with alleged power market manipulation in the United States. It has proposed a record $470 million fine for Barclays and is seeking $1.5 million from Deutsche Bank. Both banks are fighting the charges.
JPMorgan's punishment is unique in that it stems from a dispute over the bank's refusal to hand over documents in a market manipulation investigation, not a finding of manipulation. When FERC last imposed a similar ban on a major market player, the target was Enron Corp, the trading firm that infamously manipulated the California power market in 2000 and subsequently blew up in an accounting scandal.
FERC Chairman Jon Wellinghoff has denied the agency is increasingly going after banks. "We're an equal opportunity enforcer," he told reporters last week.
Dimon said, "Sometimes the penalties dwarf the crime - I mean, not even close. I'm not that sure that's fair to my shareholders."
The trading ban, announced Nov. 15, is scheduled to take effect next April.