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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
indiabrazil
1 Nov 14 05:18:13
RT @jpmorgan: Seen in #Pennsylvania: A $JPM employee snapped this picture of a foggy autumn morning on his way to the office. http://t.co/x…
Jeff K Davis
1 Nov 14 04:04:32
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1 Nov 14 03:01:10
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31 Oct 14 22:03:57
JP Morgan found hackers through breach of corporate event website: media $JPM http://t.co/oJtJJRzPIV
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31 Oct 14 20:10:50
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31 Oct 14 18:05:25
Why JPMorgan Chase & Co. Stock Is Flat This Year $JPM http://t.co/GTZNV5hyVo
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VimpelCom Ltd Given Underweight Rating at JPMorgan Chase & Co. (VIP) $JPM http://t.co/hvhnI7npeF
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31 Oct 14 17:03:26
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US Banking News
31 Oct 14 16:53:21
Insider Selling: JPMorgan Chase & Co. Insider Sells 1,144 Shares of Stock $JPM http://t.co/brJge7QAgV
FinSentS SP500
31 Oct 14 16:29:38
$JPM:US Investor to object JP Morgan settlement #JPMORGAN CHASE & CO http://t.co/2qjoJC0pDY #SP500
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31 Oct 14 16:20:05
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31 Oct 14 16:15:27
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31 Oct 14 15:53:49
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31 Oct 14 14:36:08
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Stock Wire
31 Oct 14 14:12:26
DineEquity Receives “Overweight” Rating from JPMorgan Chase & Co. (DIN) $JPM http://t.co/zBgyZvOpHk
$Stocknewsalerts
31 Oct 14 13:45:55
$JPM New SEC Document(s) for JPMorgan Chase & Co. From our Stock News Alerts App
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31 Oct 14 13:38:45
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Stock Wire
31 Oct 14 12:43:21
One Put, One Call Option To Know About for JPMorgan Chase $JPM http://t.co/ii9bw7rJ1i
Stock Wire
31 Oct 14 12:43:20
Scott Speaker will head JPMorgan Chase amp; Co.'s global commodities ... $JPM http://t.co/hJCL008lps
Stock Wire
31 Oct 14 12:43:19
United Microelectronics Corp Stock Rating Upgraded by JPMorgan Chase & Co ... $JPM http://t.co/cUkmn68AfU
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31 Oct 14 12:30:49
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Daily Contracts
31 Oct 14 12:30:01
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NASDAQ
31 Oct 14 12:25:09
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SWIFT
31 Oct 14 12:25:02
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NASDAQ
31 Oct 14 12:22:22
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31 Oct 14 12:10:04
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31 Oct 14 12:05:01
JPMorgan Chase : World's Major Banks Poured Over $80 Billion into Coal Last Year Alone http://t.co/jrnqphIw3y $JPM
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31 Oct 14 11:32:10
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31 Oct 14 11:31:38
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Carlo Calvi
31 Oct 14 11:27:23
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31 Oct 14 11:25:37
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NASDAQ
31 Oct 14 11:23:11
$JPM - Free Writing Prospectus - Filing Under Securities Act Rules 163/433 (fwp) http://t.co/viXSaPkFNC
Marlen
31 Oct 14 11:22:04
$JPM Scott Speaker will head global commodities research team at JPM http://t.co/YAjuwXucoo
NASDAQ
31 Oct 14 11:19:11
$JPM - Prospectus Filed Pursuant to Rule 424(b)(2) (424b2) http://t.co/Bfj9o77Z6m
Stock Wire
31 Oct 14 11:04:26
Why JPMorgan Chase & Co. Stock Is Flat This Year $JPM http://t.co/X1Acny5dKA
Stock Wire
31 Oct 14 11:04:24
Where Are JPMorgan Shares Headed? A Technical Take $JPM http://t.co/IDNz2BbxOY
Stock Wire
31 Oct 14 11:04:18
JPMorgan Chase & Co. Reaffirms “Overweight” Rating for Shire PLC (SHP) $JPM http://t.co/h0BnBH8wFU
Fortune 500 Inc
31 Oct 14 11:03:38
RT @jpmorgan: Seen in #Pennsylvania: A $JPM employee snapped this picture of a foggy autumn morning on his way to the office. http://t.co/x…
Mamad
31 Oct 14 11:03:33
RT @jpmorgan: Seen in #Pennsylvania: A $JPM employee snapped this picture of a foggy autumn morning on his way to the office. http://t.co/x…
				
				
  +Follow July 30, 2013 1:11PM
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