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JPMorgan pays $410M to settle energy case

Keywords: Tags  JP Morgan Chase & Co., J.P. Morgan Ventures Energy Corp., market manipulation, fined, settlement, FERC, Federal Energy Regulatory Commission, California U.S. Midwest

CHICAGO — A JPMorgan Chase & Co. subsidiary has agreed to pay $410 million to the Federal Energy Regulatory Commission (FERC) after being accused of manipulating electricity markets in California and the U.S. Midwest from September 2010 to November 2012.

The settlement "sends a strong signal that market manipulation is being taken seriously," FERC commissioner Tony Clark said in a statement July 30.

The New York-based bank said J.P. Morgan Ventures Energy Corp. has agreed to pay the settlement without admitting or denying any violations.

JPMorgan said July 26 that it was pursuing "strategic alternatives" for its physical commodities business, which includes its Henry Bath metals warehousing operations (, July 26). The announcement came just three days after the bank came under scrutiny during a Senate hearing into whether U.S. holding banks should be active in physical commodities trading while also holding assets in the sector.

But aluminum industry participants have reported that developments at JPMorgan have had, at least initially, little impact on metals markets because the bank’s tangle with FERC was sparked by its energy dealings (, July 29).

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