JP Morgan to settle over US energy rigging charges

Michael Bow
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JP MORGAN Chase was last night publicly accused by a US federal watchdog of manipulating American energy markets in a series of trades made between 2010 and 2011.

The Wall Street bank, led by high profile chief executive Jamie Dimon, is widely expected to settle the charges with the Federal Energy Regulatory Commission (Ferc), the US energy market regulator, within the next few days, City A.M. understands.

Ferc yesterday claimed JP Morgan’s energy division, JP Morgan Ventures Energy Corporation, broke market rules by executing eight “manipulative bidding strategies”.

The strategies are thought to relate to trades made in the California and Michigan electricity markets between September 2010 and June the following year.

JP Morgan has previously denied any wrongdoing. Last night it declined to comment.

The publication of Ferc’s so-called notice of alleged violations yesterday, which details the case against JP Morgan, is a formal step undertaken by the regulator before it publishes a final outcome.

Any fine for the bank would come hot on the heels of the $453m (£299m) fine dished out by Ferc to Barclays, in a sign of the regulators’ increasing muscle.

The British bank is currently contesting the decision in court. Barclays has said it will “vigorously” defend the case.

Ferc’s announcement follows an announcement on Friday by JP Morgan that it was selling its commodity trading desk, which trades oil, gas, power and metals.