US accuses JPMorgan of manipulating power prices
US accuses JPMorgan of squeezing excessive payments from the agencies that run the power grids in California and the Midwest, federal officials said Monday. US official fined a British power company $453 million for similar offenses to the ones of which JPMorgan stands accused .
The Federal Energy Regulatory Commission said in an enforcement notice Monday that the bank used improper bidding strategies to squeeze excessive payments from the agencies that run the power grids in California and the Midwest.
JPMorgan has reportedly been in negotiations with the regulator to reach a settlement over the allegations. The agency recently levied a $453 million fine on Barclays, Britain's second-largest bank, for manipulating electricity prices in California and other western states. Barclays is disputing the allegations.
The notice could be a prelude to a settlement with New York-based JPMorgan, which is the largest U.S. bank.
JPMorgan spokesman Brian Marchiony declined to comment.
FERC's enforcement staff said its investigation had found improper trading practices were used at the company's Houston-based subsidiary, JPMorgan Ventures Energy Corp.
The 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, FERC said. The agency that runs the Midwestern power grid, now called the Midcontinent Independent System Operator, covers all or parts of 15 states and the Canadian province of Manitoba.