U.S. May Charge JPMorgan For Power Market ManipulationSubmitted by cooper11 on Sat, 05/04/2013 - 18:14
(Reuters) - The regulator of U.S. power markets appears likely to pursue manipulation charges against JPMorgan Chase & Co , analysts said, after a New York Times report on the agency's document that seemed to lay out its case.
The Times said on Friday it reviewed a confidential, 70-page government document that the U.S. Federal Energy Regulatory Commission (FERC) sent to JPMorgan in March, which alleged the bank manipulated the power market in California and Michigan in 2010 and 2011.
FERC investigators found JPMorgan devised "manipulative schemes" that transformed "money-losing power plants into powerful profit centers," the Times reported, citing the document. It said the bank has until mid-May to respond.
It has been clear since last summer that FERC was pursuing a deep enquiry on JPMorgan's trading activities, the latest in a string of FERC investigations that have rattled the U.S. power market and - in the case of rival bank Barclays Plc - concluded with $470 million in proposed penalties.
FERC has not moved to publicly charge JPMorgan, but experts said that now seemed likely.
"FERC staff would not have gone to the trouble of putting together a 70-page document without a case. If they have gotten this far they will likely pursue it," said Susan Court, a former senior lawyer at FERC who is principal of SJC Energy Consultants LLC in Arlington, Virginia.
The document also criticized Blythe Masters, JPMorgan's head of global commodities and former chief financial officer, saying she "falsely" denied under oath that she was aware of schemes carried out by a group of energy traders in Houston, according to the Times.