| July 30
July 30 JPMorgan Chase & Co agreed on
Tuesday to pay $410 million to settle allegations of power
market manipulation in California and the Midwest, the latest in
a series of high-profile inquiries by U.S. federal energy
The settlement, announced by the Federal Energy Regulatory
Commission (FERC), will allow Chief Executive Jamie Dimon to
close the books on one of several costly run-ins with regulators
over the past year. It came days after the bank said it was
quitting the physical commodities business.
JPMorgan Ventures Energy Corp, the commodity trading unit
that became one of the biggest U.S. electricity traders with the
2008 acquisition of Bear Stearns, agreed to pay a civil penalty
of $285 million and disgorge $125 million for "manipulative
bidding strategies" September 2010 through November 2012.
It is the second largest penalty in FERC history.
JPMorgan has already sold the rights to buy the gas and sell
the power from its California plants.
JPMorgan spokesman Brian Marchiony said the settlement would
"not have a material impact on our earnings" because the bank
had previously set aside reserves.
FERC said JPMorgan admitted the facts in the agreement, but
"did not admit or deny the violations."
Dimon has moved this year to resolve multiple government
investigations and correct problems that regulators have found
at the bank.
The deal also came amid unprecedented political scrutiny of
Wall Street's involvement in the raw materials supply chain.
Lawmakers have questioned whether banks should own metals
warehouses and power plants, while the U.S. Federal Reserve
reviews a landmark 2003 decision that first let them trade
As expected, the FERC deal did not cite specific traders or
JPMorgan's commodities chief Blythe Masters, who spent billions
of dollars over the past five years to build JPMorgan's oil,
power, gas and metals business.
JPMorgan had vowed in May to fight the FERC charges and
dispute allegations that employees lied or acted inappropriately
in the matter. But it later entered settlement discussions.