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JP Morgan Fined $410 Million in Energy Price Fixing Scandal

  +Follow July 30, 2013 1:11PM
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JP Morgan Chase & Co. (JPM) ripped off utility providers, and now they’re being forced to pay it back. Following a probe by the U.S. Federal Energy Regulatory Commission that found the company manipulated energy prices in California and the Midwest, the financial giant has agreed to pay over $410 million in fines.

The fine is a small inconvenience for the largest bank in the world, who will pay $285 million back to the US government, $124 million to electric grid operators in California, and $1 million to a Midwest operator. JP Morgan had been accused of artificially driving up prices by engaging in various price fixing schemes to artificially inflate the prices utility customers would pay for electricity.

Despite being one of the only financial powerhouses to never lose money during the 2008 financial crisis, the company has been dogged by allegations of highly unethical business practices that come at the expense of investors. According to the New York Times, eight federal agencies have been investigating the bank in 2013 alone, including the Federal Deposit Insurance Corporation, the Commodity Futures Trading Commission, and the Securities and Exchange Commission.

JP Morgan has been simultaneously lauded and lionized for escaping the investigations with relatively paltry fines and a string of profitable quarters, but a trading loss of $6.2 billion in April 2012, courtesy of the bank’s London branch, showed the first signs that JP Morgan had serious underlying issues.

The loss was singled out by CEO Jamie Dimon as being a result of trades that were “flawed, complex, poorly reviewed, poorly executed, and poorly monitored." The bank has become so large and autonomous that overly risky, complex, and possibly illegal trading methods often fly past upper management, to the point where Dimon wasn’t even aware of what had happened until the company realized such magnanimous losses.

The massive trading losses spurred the passage of the Dodd-Frank Wall Street Reform Protection Act, which has sought to curb impropriety by banks that end up damaging not just investors, but as is the case with the most recent allegations, small businesses and utility customers.

Concerning the current scandal involving unethical trading practices, JPMorgan spokesman Brian Marchiony simply said, “We’re pleased to have this matter behind us.” While that scandal is already written off, the matter of paying off the rest of their regulatory fines is far from over. Dimon has said JP Morgan is likely to shell out over half a billion in settlements in 2013 alone.

This is a drop in the bucket for a $210 billion market cap company, one that still posts record profits. But the bank, infamous for stonewalling regulators, appears to have lost a major battle in the war.   

JP Morgan's stock  is down .40 percent to hit $55.46 a share. They're up 24.30 percent on the year. 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


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Results for jpm
Gubb
19 Sep 14 11:49:58
RT @Uldis_Zelmenis: . @toby_n @cullenroche $JPM: Equity allocations of US households vs. S&P 500 PE ratio http://t.co/IY5rr8avj1
Sentimentcharts
19 Sep 14 11:49:43
RT @Uldis_Zelmenis: . @toby_n @cullenroche $JPM: Equity allocations of US households vs. S&P 500 PE ratio http://t.co/IY5rr8avj1
NASDAQ
19 Sep 14 11:49:13
$JPM - Free Writing Prospectus - Filing Under Securities Act Rules 163/433 (fwp) http://t.co/oRKOPsKm3k
Uldis Zelmenis
19 Sep 14 11:48:57
. @toby_n @cullenroche $JPM: Equity allocations of US households vs. S&P 500 PE ratio http://t.co/IY5rr8avj1
alisaparenti
19 Sep 14 11:47:49
#Alibaba eclipses some big US companies in market cap. $BABA >> $JPM $IBM $ORCL and @AMZN http://t.co/vKmmXBaf9i http://t.co/kpG6fM7WMt
NASDAQ
19 Sep 14 11:40:09
$JPM - Prospectus Filed Pursuant to Rule 424(b)(2) (424b2) http://t.co/g4xurAhBEy
Mingli Yong
19 Sep 14 11:38:10
RT @jpmorgan: Seen in the #Philippines: This shot of the Paoay Church & its Baroque architecture was taken by a $JPM employee. http://t.co/…
Fortune 500 Inc
19 Sep 14 11:34:37
RT @jpmorgan: Seen in the #Philippines: This shot of the Paoay Church & its Baroque architecture was taken by a $JPM employee. http://t.co/…
B G KRISHNA
19 Sep 14 11:32:24
RT @jpmorgan: Seen in the #Philippines: This shot of the Paoay Church & its Baroque architecture was taken by a $JPM employee. http://t.co/…
Stock Signaling
19 Sep 14 11:31:20
Upgraded Stocks Trading in a New Range: $PDLI $FRAN $NCMI $FHN $TCBI $GNC $DD $OZRK $MDVN $JPM $MBFI $ARCB $RCAP $LVLT $RDN #watchlist #dow
J.P. Morgan
19 Sep 14 11:30:57
Seen in the #Philippines: This shot of the Paoay Church & its Baroque architecture was taken by a $JPM employee. http://t.co/XS5TX83HQy
CocoWalk
19 Sep 14 11:30:33
RT @BrianBandell: JPMorgan Chase Bank $JPM coming to @CocoWalk1 http://t.co/hHLyeHThWm via @SFlaBizJournal
DeidreZune
19 Sep 14 11:17:52
#ApplePay inserts $AAPL into the payments system as #kingmaker -- says Reuters http://t.co/7fUtkdOSfC $GOOGL $V $MA $AXP $JPM $C $BAC $WFC
Investors Hangout
19 Sep 14 11:07:41
danrocks: $MLHC keeping this on watch $JPM $HOT $ETAK $VOIS http://t.co/0rmBuP1Q6Z
Investors Hangout
19 Sep 14 11:07:38
clayton: $JPM 61.34 http://t.co/zU9X8fSH4a
Investors Hangout
19 Sep 14 11:00:17
danrocks: $MLHC keeping this on watch $JPM $HOT $ETAK $VOIS http://t.co/Ec1j3yI2Li
Investors Hangout
19 Sep 14 11:00:13
clayton: $JPM 61.34 http://t.co/pk0S0g1foE
WinningStockCoach
19 Sep 14 11:00:05
What WILL control how YOUR #stock trades this week? http://t.co/KU9PzTQy8x $AAPL $NFLX $AMZN $TSLA $GS $JPM $CAT $GPRO
Juan Diego PeñaCanal
19 Sep 14 10:51:55
RT @bespokeinvest: At $94 per share, $BABA will have a larger market cap than $JPM and any of the other firms managing the IPO.
Carolyn B Miciano
19 Sep 14 10:42:28
Swing trading ideal for busy folks. Complete roadmap http://t.co/yLZsCIoFks $JPM $BA $BAC
Stock Moo
19 Sep 14 10:42:06
$jpm: Retirement Funds Are Loading Up on Stocks Again http://t.co/eJNL81qnCu
danrocks
19 Sep 14 10:37:11
$MLHC keeping this on watch $JPM $HOT $ETAK $VOIS $EBAY http://t.co/EgTBA7SUH4
BUZZ Just-In
19 Sep 14 10:33:55
These assets are seeing a jump in tweets $V $LNKD $DD $JPM $DAX http://t.co/7jFeP0gpNI
clayton
19 Sep 14 10:33:35
$JPM 61.34 http://t.co/ZBa8ODnUIE
ninjaDONNY
19 Sep 14 10:23:42
RT @TSTbanking: Citigroup, Bank of America, and JPMorgan Chase are finally showing signs of life: http://t.co/wcAbVhQ8yA $C $BAC $JPM http:…
I. Barros
19 Sep 14 10:22:29
RT @valuewalk: Home Depot Credit Card Breach Bigger Than Target's http://t.co/5fXPF1zsj8 $HD $TGT $COF $JPM $SVU $PFCB
chartguy89
19 Sep 14 10:21:55
WMT Stock Chart $WMT $JPM $GRCU $NKE http://t.co/1UV0vXUv2T http://t.co/LCxLAIZOtB
  The  TURK
19 Sep 14 10:19:53
RT @valuewalk: Home Depot Credit Card Breach Bigger Than Target's http://t.co/5fXPF1zsj8 $HD $TGT $COF $JPM $SVU $PFCB
Stock Wire
19 Sep 14 10:19:40
Brit PLC's Overweight Rating Reaffirmed at JPMorgan Chase & Co. (BRIT) $JPM http://t.co/9AINJZISiw
Stock Wire
19 Sep 14 10:19:39
JPMorgan Chase Announces Redemption of $1.7 Billion of Fixed/Floating Rate ... $JPM http://t.co/Zn2az7cXPL
ValueWalk
19 Sep 14 10:18:46
Home Depot Credit Card Breach Bigger Than Target's http://t.co/5fXPF1zsj8 $HD $TGT $COF $JPM $SVU $PFCB
Marco DiPompeo
19 Sep 14 10:16:53
RT @bespokeinvest: At $94 per share, $BABA will have a larger market cap than $JPM and any of the other firms managing the IPO.
NASDAQ
19 Sep 14 10:16:34
$JPM - Prospectus Filed Pursuant to Rule 424(b)(2) (424b2) http://t.co/0Gulp4TRfA
Dan
19 Sep 14 10:14:01
$JPM OI for maturity 09/20/2014. 52.50 Highest put. 57.50 Highest call. http://t.co/8JZpO1wl7q
Hedge Fund of One
19 Sep 14 10:04:14
Which $BABA underwriter will take lead in supporting low of day? $CS $DB $GS $JPM or $MS (back for another round of fingerpointing). :-)
Stock Signaling
19 Sep 14 10:01:03
25 Stocks To Watch: http://t.co/Vtx6dLy0Nw : $PDLI $TCBI $FHN $CNQR $JPM $TRP $GNC $DD $SCHW $ARCB $RDN $ILMN $AEO $BLDP $AREX #wallstreet
Dan
19 Sep 14 10:00:05
$JPM Max Pain is 57.50 for maturity 09/20/2014. Last close = 61.24. http://t.co/j6OqiZb0cp
Stock Wire
19 Sep 14 09:59:59
Thomas Cook Group plc Given Overweight Rating at JPMorgan Chase & Co ... $JPM http://t.co/FcW2e15JpS
StockExpert
19 Sep 14 09:51:50
$RGDO Wish I had 15 Million Dollars I would Buy 50% Of This Company take control of 73 Million Dollars in Cash $AAPL $FB $BAC $C $JPM $SPY
Liz C
19 Sep 14 09:51:14
RT @jpmorgan: The $JPM #FinLab aims to identify tools to help consumers increase savings, improve credit and build assets: http://t.co/xg0S…
chartguy89
19 Sep 14 09:46:45
TVIX Stock Chart $TVIX $WCP.TO $GRUB $JPM http://t.co/CEAlVY6SyX http://t.co/5hxn2LN1nI
TalkMarkets
19 Sep 14 09:44:33
Bank Stock Roundup $JPM $CS $COF $MS $DB $WFC $C $GS $BAC... http://t.co/lRH74Zn1qu
TopstepTrader
19 Sep 14 09:36:02
$BABA $237 Billion mkt cap. $JPM $230 B
TopstepTrader
19 Sep 14 09:35:36
$BABA is bigger than $JPM. think about that.
LIFT
19 Sep 14 09:35:32
RT @jpmorgan: The $JPM #FinLab aims to identify tools to help consumers increase savings, improve credit and build assets: http://t.co/xg0S…
Carolyn B Miciano
19 Sep 14 09:27:47
Dangers on highly correlated positions http://t.co/QS0uCeLh5Z $JPM $BA $BAC
Stock Wire
19 Sep 14 09:26:48
JPMorgan Chase Now #12 Largest Company, Surpassing Procter & Gamble $JPM http://t.co/WfOdleCS4u
Stock Wire
19 Sep 14 09:26:46
Rite Aid Rating Reiterated by JPMorgan Chase & Co. (RAD) $JPM http://t.co/3OphGBClAe
Mark Newton
19 Sep 14 09:24:33
Based on $92.49, $BABA is worth nearly the same as $WMT, $JPM -Crazy that #Alibaba on 1st day worth more than banks that brought it Public
Howie Chamberlain
19 Sep 14 09:23:56
RT @bespokeinvest: At $94 per share, $BABA will have a larger market cap than $JPM and any of the other firms managing the IPO.
				
				
  +Follow July 30, 2013 1:11PM
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