JPMorgan reportedly could settle manipulation charges for $500M
By Collin Eaton, Houston Business Journal
JPMorgan Chase & Co. could face charges related to energy trading in Houston.
JPMorgan Chase & Co. (NYSE: JPM) is reportedly in talks with federal energy regulators to settle accusations of market manipulation, allegedly stemming from the bidding activities of energy traders in Houston. The potential price tag to settle: about $500 million, The New York Timesreports Wednesday.
Last May, news of the Federal Energy Regulatory Commission’s potential actionagainst the New York financial giant went public after the New York Times reported on a leaked, 70-page government document detailing allegations against JPMorgan.
FERC alleged JPMorgan traders misrepresented prices of electricity contracts with California and Michigan between September 2010 and June 2011, resulting in authorities of those states providing about $83 million in over-payments to JPMorgan, the largest bank in Houston with $56.4 billion in deposits here.
If the energy markets regulator fines the bank $500 million, that could be a record for FERC, according to the Times.
“We intend to vigorously defend the firm and the employees in this matter,” Kristin Lemkau, a spokeswoman for JPMorgan, said in a May statement.
FERC had sent the big bank its notice in March, and industry observers had mixed reactions to the news when I called for comment two months ago.
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