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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. To read our full disclosure, please go to: http://www.equities.com/disclaimer


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Results for jpm
Liquidax
7 Jul 15 14:50:34
RT @JCMcCracken: #Ferrari picks #UBS to handle IPO. $GS, $JPM also likely to get roles. http://t.co/wbVjENUa5w
LaTroy
7 Jul 15 14:50:08
RT @RiskReversal: ICYMI: Trade Update $JPM: Closing Half July Put Spread for a Double http://t.co/ULEqQ38ufz
Juan Esteban Sierra
7 Jul 15 14:48:11
RT @TheStreet: Why JPMorgan is the best place for analyst recommendations http://t.co/fXsGSIVj0S $JPM
Capital Market Labs
7 Jul 15 14:46:45
Interactive Chart -> http://t.co/Rs8uTgpwSW $JPM Assets are Growing. http://t.co/sGnFRmHbgT
Options Answers
7 Jul 15 14:46:37
RT @PolgarStocks: XIV VelocityShares Daily Inverse VIX Short Term ETN 52Wk Low http://t.co/DovOu5ZNxH $XIV $SQQQ $AMZN $JPM #XIV #stockmar…
Dan Nathan
7 Jul 15 14:39:13
ICYMI: Trade Update $JPM: Closing Half July Put Spread for a Double http://t.co/ULEqQ38ufz
Derrick Walker
7 Jul 15 14:37:10
RT @TheStreet: JPMorgan Chase employees travel Uber-style after late nights http://t.co/jy6zMZH9rr $JPM http://t.co/dLmna7BaKk
stockmarketnow
7 Jul 15 14:37:03
RT TheStreet: JPMorgan Chase employees travel Uber-style after late nights http://t.co/nCKgQrfQMv  $JPM http://t.co/ngCLBI1DNk
TheStreet
7 Jul 15 14:30:46
JPMorgan Chase employees travel Uber-style after late nights http://t.co/jy6zMZH9rr $JPM http://t.co/dLmna7BaKk
Nancy Boots Davison
7 Jul 15 14:18:16
agree"@paulwoll: Financials look bearish to me still so suggest caution when those are weak.... JMHO. $XLF $FAS $GS $JPM $C etc etc.”
Christoph Rauwald
7 Jul 15 14:09:53
RT @JCMcCracken: #Ferrari picks #UBS to handle IPO. $GS, $JPM also likely to get roles. http://t.co/wbVjENUa5w
Stock Wire
7 Jul 15 14:01:25
J.P. Morgan Chase Seeks to Move 2150 Jobs From NYC to Jersey City $JPM http://t.co/5ZthDrFJvp
Keegan Consult Group
7 Jul 15 13:54:16
RT @jpmorgan: $JPM is sponsoring #2015APCS in Brisbane this week. Join the conversation using #GlobalCities
Breaking News
7 Jul 15 13:54:03
$JPM: Proprietary Products: The Wall Street Raid On Your Piggy Bank: http://t.co/FBex6GPfsC
Michael Cook
7 Jul 15 13:53:25
$GEQU Nearly Doubled For Our Platinum Members In 5 Days! Subscribe To Get Our Next Pick Early: http://t.co/tQkAzBB7Gg $LVS $JPM $MHYS
stockmarketnow
7 Jul 15 13:52:12
RT TheStreet: Why JPMorgan is the best place for analyst recommendations http://t.co/HHW8avRthj  $JPM
Thalis Aniban Jr.
7 Jul 15 13:50:03
RT @TheStreet: Why JPMorgan is the best place for analyst recommendations http://t.co/fXsGSIVj0S $JPM
#HelpYouGetGAINS
7 Jul 15 13:49:12
Why JPMorgan is the best place for analyst recommendations http://t.co/mgRLsFd8ML $JPM
Dimitar Gyoshev
7 Jul 15 13:48:54
RT @TheStreet: Why JPMorgan is the best place for analyst recommendations http://t.co/fXsGSIVj0S $JPM
PolgarStocks
7 Jul 15 13:48:41
XIV VelocityShares Daily Inverse VIX Short Term ETN 52Wk Low http://t.co/DovOu5ZNxH $XIV $SQQQ $AMZN $JPM #XIV #stockmarket #stocks
Michael James
7 Jul 15 13:45:49
Our Penny Stock Pick On $GEQU Gained 83.33% For Platinum Members, In the Past 5 Days! Big News: http://t.co/Lsygm1nyn3 $LVS $JPM $MHYS
beshannonphotos
7 Jul 15 13:41:43
RT @TheStreet: Why JPMorgan is the best place for analyst recommendations http://t.co/fXsGSIVj0S $JPM
SPEND-SAVE-INVEST
7 Jul 15 13:41:42
RT @whey2muscle: The Case Against Preferred Shares - Wealth http://t.co/zHkpYfbXg1 … $BAC $GS $JNJ $KO $PG $JPM
#HelpYouGetGAINS
7 Jul 15 13:40:45
The Case Against Preferred Shares - Wealth http://t.co/zHkpYfbXg1 … $BAC $GS $JNJ $KO $PG $JPM
TheStreet
7 Jul 15 13:40:15
Why JPMorgan is the best place for analyst recommendations http://t.co/fXsGSIVj0S $JPM
Jake13
7 Jul 15 13:39:11
JPM J.P. Morgan Chase & Co. Financials http://t.co/4H4h0mMC67 $JPM $FNMA $FV $IYT #JPM #pennystocks #tradeideas
Investors Hangout
7 Jul 15 13:32:06
BAC Bank Of America Corp. Yield http://t.co/VnyNPfp95F $BAC $OCFN $JPM $HACK #BAC #tradeideas #investing
David Chung
7 Jul 15 13:29:09
Even Financials Did It: Nice price reversals by $GS, $JPM, $OZRK. These leading banks finished above key 50-day moving avgs. $BAC came close
Mike P.
7 Jul 15 13:23:45
RT @CrosbyVenture: Ferrari picks $UBS to handle IPO. $GS, $JPM also likely to get roles in offering. http://t.co/YZiORcDRN4 $ICE
Dan
7 Jul 15 13:16:00
Financials not quite as BTFDed as market $XLF $BAC $JPM $GS $DB $C http://t.co/Y7m1QQCCIu
Stock Wire
7 Jul 15 13:13:29
Phillips 66 Given New $87.00 Price Target at JPMorgan Chase & Co. (PSX) $JPM http://t.co/3h0n97ODJh
Stock Wire
7 Jul 15 13:13:28
Valero Energy Price Target Raised to $68.00 at JPMorgan Chase & Co. (VLO) $JPM http://t.co/sJPySyGBuw
Media Sentiment
7 Jul 15 13:10:03
$JPM received a new alert. Find out why at http://t.co/nZwqReM0tj #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 383
CypressTrades
7 Jul 15 13:09:50
RT @paulwoll: Financials look bearish to me still so suggest caution when those are weak.... JMHO. $XLF $FAS $GS $JPM $C etc etc.
Woll Street
7 Jul 15 13:08:55
Financials look bearish to me still so suggest caution when those are weak.... JMHO. $XLF $FAS $GS $JPM $C etc etc.
Jason Olive
7 Jul 15 13:07:35
RT @SeekingAlpha: The Case Against Preferred Shares - Wealth http://t.co/tE6Vyxq4D5 $BAC $GS $JNJ $KO $PG $JPM
Rosbel Duran
7 Jul 15 13:06:44
RT @SeekingAlpha: The Case Against Preferred Shares - Wealth http://t.co/tE6Vyxq4D5 $BAC $GS $JNJ $KO $PG $JPM
Roger Clinton
7 Jul 15 13:05:01
RT @SeekingAlpha: The Case Against Preferred Shares - Wealth http://t.co/tE6Vyxq4D5 $BAC $GS $JNJ $KO $PG $JPM
Quantpost $JPM
7 Jul 15 13:04:39
$JPM News: "The Case Against Preferred Shares - Wealth $BAC $GS $JNJ $KO $PG $JPM" http://t.co/KGKwVkm7V4 Analyze: https://t.co/Nr3YNImyzd
Quantpost Healthcare
7 Jul 15 13:04:39
$JNJ News: "The Case Against Preferred Shares - Wealth $BAC $GS $JNJ $KO $PG $JPM" http://t.co/3CwlClbFvf Analyze: https://t.co/GM0ywAearT
Quantpost Financial
7 Jul 15 13:04:39
$BAC $GS $JPM News: "The Case Against Preferred Shares - Wealth $BAC $GS $JNJ …" http://t.co/QChF1LOLst Analyze: https://t.co/P7J5znvPM4
Quantpost $BAC
7 Jul 15 13:04:39
$BAC News: "The Case Against Preferred Shares - Wealth $BAC $GS $JNJ $KO $PG $JPM" http://t.co/WgZ2IPBTru Analyze: https://t.co/My6Yizc8s5
Income Investing SA
7 Jul 15 13:04:37
The Case Against Preferred Shares - Wealth http://t.co/GgIRobDvdS $BAC $GS $JNJ $KO $PG $JPM
Seeking Alpha
7 Jul 15 13:04:37
The Case Against Preferred Shares - Wealth http://t.co/tE6Vyxq4D5 $BAC $GS $JNJ $KO $PG $JPM
Sterph1
7 Jul 15 13:02:11
@petenajarian Lost $JPM at $65.50 quicker than expected (though think will see again) so nada for me. You?
 Pierce Crosby
7 Jul 15 13:00:18
Ferrari picks $UBS to handle IPO. $GS, $JPM also likely to get roles in offering. http://t.co/YZiORcDRN4 $ICE
Joe Woelfel
7 Jul 15 13:00:03
JPMorgan Chase Employees Travel Uber-Style After Late Nights $JPM http://t.co/ljKM6Q7nKQ
12Stocks.com
7 Jul 15 12:58:42
Dow #Stocks Trend $DIS $NKE $PG $HD $WMT $KO $TRV $VZ $BA $MCD $GS $JPM $PFE $UNH $MRK $IBM $V $JNJ $AXP $CAT @ http://t.co/TvzJfd0RGT
Breaking News Now
7 Jul 15 12:57:03
$JPM: JPMorgan Chase Employees Travel Uber-Style After Late Nights: http://t.co/VGzXNpuMxp
Briefing.com
7 Jul 15 12:54:37
Upcoming #earnings conference calls/webcasts http://t.co/SjK3mv2l4P $TCS $AA $PEP $CUDA $PSMT $JNJ $JPM $WFC $BAC $BLK $CSX $YUM $NFLX $INTC
				
				
  +Follow July 30, 2013 1:11PM
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