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TIMELINE-JPMorgan and a U.S. regulator's power manipulation case
July 17, 2013 / 9:17 PM / 4 years ago

TIMELINE-JPMorgan and a U.S. regulator's power manipulation case

July 17 (Reuters) - JPMorgan Chase & Co and the U.S. Federal Energy
Regulatory Commission (FERC) are close to reaching a settlement that could
result in the bank paying the largest penalty ever over allegations of power
market manipulation in California and the Midwest, the Wall Street Journal
reported on Wednesday.
    The amount to be paid is not yet known, but past discussions have involved
close to $1 billion, the newspaper said, citing people familiar with the matter.
 

JPMORGAN POWER TRADING TIMELINE
2005 - FERC authorizes JPMorgan to sell power at market based rates, starting
its trading in U.S. power markets.

2008-2010 - JPMorgan acquires a number of power plants and electricity tolling
agreements through its purchase of Bear Stearns and RBS Sempra during the
financial crisis.

March 2011 - Grid operator California ISO filed with national regulator FERC to
fix a loophole in the power market bidding process after a party's behavior
"aggravated the market impact of the flaw." That party was later identified as
JPMorgan.

March 2011 - California ISO informs JPMorgan the grid operator reviewed the
bank's bidding activities and intends to refer the matter to the FERC Office of
Enforcement, marking the start of FERC's investigation.
    
April 2011 - After California ISO asked FERC to close a loophole that allowed
traders to engage in exploitative power bidding practices, the state grid
operator said a trader, later identified as JPMorgan, started to immediately
exploit another loophole in their rules.

April 2011 - California ISO forces power sellers to reimburse $35.3 million to
electricity distributors from trades executed from August 2010 to March 2011 due
to effect of exploitive bidding practices.

Feb-June 2012 - California ISO imposes a non-public $486,000 penalty against
JPMorgan in February for failing to submit all information the grid operator
sought as part of its investigation into exploitative bidding practices. FERC
rejects the bank's appeal of the penalty.

June 2012 - Grid operator California ISO asks FERC to approve its plan to force
power sellers to reimburse money earned from exploitive bidding practices to
electricity distributors from April 2009 to March 2011. The ISO had already
forced power sellers to reimburse $35.3 million in April 2011 for the period
between August 2010 and March 2011.

July 2012 - FERC subpoenas JPMorgan in federal court to provide emails as part
of its investigation into market manipulation in California and the Midwest, the
first time the bank has been publicly named as the party that allegedly
manipulated the California market. 

November 2012 - FERC suspends JPMorgan's authority to sell power at market based
rates for six months for making factual misrepresentations during an
investigation into market manipulation. The ban is to start in April 2013.
 
    
April 2013 - JPMorgan six-month ban on selling power at market based rates
begins.

May 2013 - An internal FERC document leaked to the New York Times says the
regulator may charge JPMorgan with power market manipulation. The document also
says JPMorgan's commodities chief, Blythe Masters, may have made "false and
misleading statements," to the regulator under oath. 

May 2013 - JPMorgan tells shareholders FERC may take action against bank for
certain power market bidding activities. (ID:nL2N0DP33K]

May 2013 - JPMorgan reduces presence in California power market, selling the
right to market electricity from three power plants. 

June 2013 - FERC approves a request from California ISO to force JPMorgan and
other traders to reimburse $16.7 million to electricity distributors in the
state for disruptive bidding practices between April 2009 and March 2011.

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