JPMorgan Agrees to $410 Million Fine for Electricity Market Manipulation
ENERGY SOLUTIONS FORUM, 13 August 2013
JPMorgan Chase & Co. has accepted a $410 million penalty to settle accusations of electricity market manipulations in California and the Midwest.
On July 30, 2013, the Federal Energy Regulatory Commission (FERC) issued an order approving stipulation and consent agreement that requires JPMorgan Ventures Energy Corporation (JPMVEC) to settle allegations of electricity market manipulation in California and the Midwest between September 2010 and November 2012. The $410M fine includes $285M in civil penalty (to be paid to the U.S. Treasury) and $125M of disgorged profits ($124M to California ratepayers, and $1M to Midwest ratepayers). The agreement also requires JPMVEC to waive claims for additional payments from California Independent System Operator Corporation (CAISO) and adopt additional compliance measures. JPMVEC, a subsidiary of JPMorgan Chase & Co., accepted the settlement facts without admittance or denial of violations.
FERC initiated investigations in response to multiple referrals by CAISO and Midwest Independent Transmission System Operator, Inc. (MISO) market monitors of manipulative bidding practices during 2011 and 2012. It approved four emergency tariff filings from both independent system operators (ISOs) to make tariff changes effective from the filing date rather than the order date. In November 2012, FERC suspended JPMVEC’s electric market-based rate authority for six months with effect from April 1, 2013 for submitting false information.
