BBC News, 30
July 2013
Related
Stories
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JP Morgan chief executive Jamie
Dimon has been trying to improve
the image of the bank
|
The Federal
Energy Regulatory Commission (FERC) agency alleged JPMorgan's trading practices
drove up prices for electricity, mainly in California and the Midwest.
The fine is
the second largest penalty in FERC history.
The bank
did not admit any wrongdoing as part of the settlement.
JPMorgan
said it was "pleased to have reached an agreement with FERC to put this
matter behind it.'"
JPMorgan
spokesman Brian Marchiony said the settlement would "not have a material
impact on our earnings" because the bank had previously set aside reserves
for the case.
FERC
claimed JPMorgan's energy unit used five "manipulative bidding
strategies" in California between September 2010 and June 2011, and three
in the Midwest from October 2010 to May 2011.
The
regulator alleges that traders at JP Morgan's energy unit created artificial
conditions to boost the price of energy.
Under the
deal, the bank must also make annual reports to the commission for three years
detailing its power business in the United States.
JPMorgan has
already sold the rights to buy the gas and sell the power from its California
plants.
The energy
rigging case is the latest embarrassment to hit JP Morgan. Last year, the bank
suffered a $6.2bn (£4bn) loss after trades made by the so-called London Whale
turned out to be bad.
Last year
FERC fined Barclays $453m (£300m) for allegedly manipulating electricity
prices. Barclays protested FERC's findings, but US regulators upheld the fine
earlier this month.
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