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By Catholic Online (NEWS CONSORTIUM)

7/30/2013 (2 years ago)

Catholic Online (www.catholic.org)

Company will pay $410 million for manipulating energy in California, Michigan

JPMorgan Chase has agreed to pay $410 million to the nation's energy regulator. The payout is a settlement that traders in it Houston offices manipulated electricity markets in the states of California and Michigan. The decision will not directly penalize JPMorgan Chase executives.

The payout is a settlement that traders in it Houston offices manipulated electricity markets in the states of California and Michigan. The decision will not directly penalize JPMorgan Chase executives.

The payout is a settlement that traders in it Houston offices manipulated electricity markets in the states of California and Michigan. The decision will not directly penalize JPMorgan Chase executives.

Highlights

By Catholic Online (NEWS CONSORTIUM)

Catholic Online (www.catholic.org)

7/30/2013 (2 years ago)

Published in U.S.

Keywords: JPMorgan Chase, Michigan, California, energy rates, manipulation


LOS ANGELES, CA (Catholic Online) - The agreement is a record settlement for the regulator, the Federal Energy Regulatory Commission, which has ramped up its policing of Wall Street trading in recent months.

"We are pleased to put this matter behind us," Brian Marchiony, a spokesman for JPMorgan says. "Due to reserves previously set aside, this settlement will not have a material impact on earnings."


The commission falling short of penalizing individual JPMorgan executives is a reversal of a decision made earlier this year. At that time, the agency warned JPMorgan that it might seek to sanction Blythe Masters, the influential leader of the bank's commodities business. Investigators had also originally planned to recommend that the agency hold three of her employees "individually liable."


The accusations of market manipulation initially surfaced this spring in a confidential commission document. The document, a warning that investigators would recommend that the agency pursue civil charges, had originally concluded that Ms. Masters gave "false and misleading statements" under oath.


From the outset, JPMorgan argued that Ms. Masters never made false statements.


The controversy began after JPMorgan originated from its rights to sell electricity from power plants that it acquired after the bank took over Bear Stearns in an emergency rescue in 2008.


The power plants owned by the bank at that time were outdated and inefficient. Traders in Houston found a work around. In order to transform the power plants into profit generators, the agency said, JPMorgan's traders adopted eight different "schemes" from September 2010 to June 2011.


Some of the strategies included electricity at prices that appeared falsely attractive to state energy authorities. Authorities in California and Michigan then made excessive payments that helped drive up energy prices, the regulator said.


As part of this week's settlement, JPMorgan will pay a civil penalty of $285 million to the Treasury Department. JPMorgan will also pay $125 million in "unjust profits," the energy commission says. That money will go to rate payers in both California and the Midwest, where the agency said JPMorgan's trading practices drove up prices for electricity.


The bank must also make annual reports to the commission for three years detailing its power business in the U.S. under the terms of the agreement. While JPMorgan admitted to the facts of the trading strategies, outlined in the settlement, the bank did not admit or deny wrongdoing.


The case is the regulator's latest crackdown on a big bank. In January, the commission reached a $1.6 million settlement with Deutsche Bank involving accusations of improper trading in California. 


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Pope Francis: end world hunger through 'Prayer and Action'


Copyright 2016 - Distributed by THE CALIFORNIA NETWORK

Pope Francis Prayer Intentions for May 2016
Universal:
Respect for Women: That in every country of the world, women may be honored and respected and that their essential contribution to society may be highly esteemed.
Evangelization: Holy Rosary: That families, communities, and groups may pray the Holy Rosary for evangelization and peace.



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