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JP Morgan Fined $410 Million in Energy Price Fixing Scandal

  +Follow July 30, 2013 1:11PM
Tickers Mentioned:

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. 

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1 Dec 15 15:44:03
NVDA NVIDIA Corp. Yield https://t.co/ASY5bpxKAk $NVDA $JPM $IMSC $VET.TO #NVDA #nasdaq #stock
Market Realist
1 Dec 15 15:42:59
Monthly Roundup: US Financials $XLF $BAC $JPM $BK https://t.co/q8WVOPy1BO
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1 Dec 15 15:42:29
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1 Dec 15 15:27:02
$JPM $C: Citigroup Bonus Pool for Traders, Bankers Said to Be Unchanged: https://t.co/mnThbe7dXA
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1 Dec 15 15:02:11
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1 Dec 15 14:51:02
$ONDK $JPM: On Deck Capital +27% AH on JP Morgan partnership: https://t.co/YNPS0EPzzL
Quantpost $JPM
1 Dec 15 14:47:52
$JPM News: "On Deck Capital +27% AH on J.P. Morgan partnership $ONDK $JPM" https://t.co/giVPsDcb44 Analyze: https://t.co/VpQIEu6soA
Quantpost Financial
1 Dec 15 14:47:52
$JPM News: "On Deck Capital +27% AH on J.P. Morgan partnership $ONDK $JPM" https://t.co/Df0ws4RpqZ Analyze: https://t.co/J6pR2gjhs0
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1 Dec 15 14:47:52
On Deck Capital +27% AH on J.P. Morgan partnership https://t.co/WNX6sK9awM $ONDK $JPM
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1 Dec 15 14:47:51
On Deck Capital +27% AH on J.P. Morgan partnership https://t.co/WMeU8FIpdH $ONDK $JPM
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1 Dec 15 14:47:51
On Deck Capital +27% AH on J.P. Morgan partnership https://t.co/7qHQeSgYtl $ONDK $JPM
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1 Dec 15 14:47:51
On Deck Capital +27% AH on J.P. Morgan partnership https://t.co/LfrNF2leLj $ONDK $JPM
Investors Hangout
1 Dec 15 14:47:04
SRPT Sarepta Therapeutics, Inc. Filings https://t.co/8XvsIBwju3 $SRPT $GM $TGT $JPM #SRPT #finance #pennystocks
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RAI Reynolds American Inc. Day High https://t.co/hGtoy4BfBT $RAI $V $WJA.TO $JPM #RAI #invest #nasdaq
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1 Dec 15 14:44:36
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1 Dec 15 14:43:52
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1 Dec 15 14:43:37
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1 Dec 15 14:41:04
JPM J.P. Morgan Chase & Co. Current Price https://t.co/Qhwh9OoJKG $JPM $SLV $XMA.TO $G.TO #JPM #nasdaq #pennystocks
1 Dec 15 14:40:05
IBB Biotech iShares Exchange https://t.co/QUevByihNZ $IBB $JPM $TRVN $FXI #IBB #invest #nasdaq
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HYG iShares iBoxx High Yield Corporate Bond Fund P/E Ratio https://t.co/hIuSEWXE8h $HYG $SPXL $VTCQ $JPM #HYG #stocks #stockmarket
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1 Dec 15 14:34:03
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1 Dec 15 14:23:57
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1 Dec 15 14:22:07
$AMG $JPM: Platt Ambition Set Back as BlueCrest Returns Investor Money: https://t.co/q76Sh3KKdw
1 Dec 15 14:19:03
Highway bill also reauthorizes Ex-Im bank https://t.co/sYBzFPCmuq $JPM @timseymour @petenajarian https://t.co/zWZJaHcW34
Hugh Son
1 Dec 15 14:18:29
SCOOP: JPMorgan Working With On Deck to Speed Small-Business Loans https://t.co/hCjK87LNU0 via @business $JPM
Breaking News
1 Dec 15 14:17:11
$JPM: JPMorgan Working With On Deck to Speed Small-Business Loans: https://t.co/tn2v4mF3gm
1 Dec 15 14:01:54
@karenfinerman @petenajarian HUGE $JPM news *DJ JPM and OnDeck Product Will Offer Almost Real-Time Loan Approvals, https://t.co/EpU9Ucx66x
1 Dec 15 13:57:38
……..when’s the next #askJPM? https://t.co/FRe6kf1MAu @jpmorgan $JPM
1 Dec 15 13:51:15
RT @KeystoneTrading: $jpm holding yesterdays high in the premarket after the earnings report this morning... 200 day is 40.64 $$
1 Dec 15 13:47:14
$JPM: Price Cuts Herald End of Sydney Home Boom as Foreigners Retreat: https://t.co/Ok3lMEqkhC
1 Dec 15 13:44:37
RT @KeystoneTrading: the name I am looking at in the financial sector for shorts are $JPM $WFC $PNC and $BAC but like I said wait to get th…
Brian P McCloskey
1 Dec 15 13:40:51
RT @LazT3Live: @RedDogT3 Watch the @t3live Daily Recap hosted by contributor and mentor @SperlsT3 https://t.co/yoXMOydE5L $BABA $BIDU $JPM …
Rob Smith
1 Dec 15 13:40:13
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T3 Live
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1 Dec 15 13:40:13
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1 Dec 15 13:37:36
RT @KeystoneTrading: to the short side watching mostly the financials $JPM $WFC $MS $COF $$
1 Dec 15 12:58:33
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Jim Steele
1 Dec 15 12:51:44
RT @jpmorgan: $JPM employees value serving their communities. See their impact this #GivingTuesday: https://t.co/k4Dkzs1WG7 https://t.co/MT…
pablo grossi
1 Dec 15 12:29:47
RT @jpmorgan: $JPM employees value serving their communities. See their impact this #GivingTuesday: https://t.co/k4Dkzs1WG7 https://t.co/MT…
Diego D'Aquilio
1 Dec 15 12:23:02
Dimon Says JPMorgan $JPM Plans Service With Peer-to-Peer Lender https://t.co/ZRmWxlPzlY
  +Follow July 30, 2013 1:11PM



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