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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
Pfeifer
28 Aug 14 01:55:57
RT @SconsetCapital: RT @nytimesbits: JPMorgan and Other Banks Struck by Coordinated Cyberattack http://t.co/BYbqzQzDnL cc: @JPMorganCEO $…
Steve Mahoney
28 Aug 14 01:54:15
Chase was Hacked Material Event $jpm @YourAnonNews FYI http://t.co/NnGtXBKC92 @carlquintanilla @jimcramer FYI
IMG FUNDING
28 Aug 14 01:52:21
SEC Stiffens Rules on Loan-Backed Securities http://t.co/eRvXr5dNdb via @daily_finance $JPM $C $GS
Wall Street Monitor
28 Aug 14 01:45:40
$JPM: JPMorgan Chase & Co. (JPM), Other US Banks Hacked, Account Information http://t.co/VRkSx8QBUA http://t.co/pZwWDra1Li
Stock Wire
28 Aug 14 01:42:49
JPMorgan Chase & Co. (JPM), Other US Banks Hacked, Account Information ... $JPM http://t.co/O0xGqUd1Dy
Patrick Cronin
28 Aug 14 01:21:27
FBI probes possible hacking incident at J.P. Morgan $JPM http://t.co/OooUVONmFc via @WSJ The virtual insecurity of global finance
Jean-Yves Creusot
28 Aug 14 00:58:55
FBI probes possible hacking incident at J.P. Morgan $JPM http://t.co/SHjZkJWAoQ via @WSJ
Stock Headlines
28 Aug 14 00:28:26
$JPM: Impact Of New SEC Rules On Banks' Revenues http://t.co/FR1AKEk908 http://t.co/OvR8CBBzvQ
Tecnologia Corriere
28 Aug 14 00:17:41
FBI probes possible hacking incident at J.P. Morgan $JPM http://t.co/V35UkpmTN8 via @WSJ
Dow Stocks
28 Aug 14 00:17:37
#Dow #stocks $JPM JPMorgan Chase Daily:-0.25% Weekly:3.38% YTD:3.92% Trend:93 / 100 http://t.co/EovIb6YJsz
Jonas_Mlynek
27 Aug 14 23:46:06
#JPMorgan $JPM navyšuje #rating #ChinaTelecom $CHA na #Overweight. #Akcie vzrostly na nové roční maximum.
Millenia Panama
27 Aug 14 23:15:50
465,000 card users' data stolen on $JPM attack on giant network breach. $FAZ is expected to perform well as$VXX #VIX http://t.co/51OxgLAxIy
ellen
27 Aug 14 23:14:36
FBI probes possible hacking incident at J.P. Morgan $JPM http://t.co/eYkBgH6qJE via @WSJ
Millenia Panama
27 Aug 14 23:12:19
This is a huge issue particularly due to rumours if Russia Is Tied #JPMorgan + other banks struck by cyberattack $JPM http://t.co/JmbqPFbdGm
Ramona Jones
27 Aug 14 22:47:45
RT @billmon1: Tomorrow at 1pm ET $JPM Vice Chaiman Nazgûl takes over @JPMordor to answer your questions for 1 hour. Tweet your Q early usin…
Action Jackson
27 Aug 14 22:44:16
@FGoria @cnbc I call bullshit->"Moore, who oversees $992billion in assets" Sorry,but 1 #ThirtySomething overseeing $992 billion? #LMAO $jpm
Stock_Markets
27 Aug 14 22:31:50
RT @Nobears_Nobulls: Cierre de algunas de las mas destacadas compañías en Walt Street $AAPL $ AIG $FB $GM $GOOG $JPM $NKE @EfektoNoticias h…
Stock News Updates
27 Aug 14 22:28:31
$JPM: JPMorgan and Four Other Banks Hit by Hackers, U.S. Official Says http://t.co/x4AsYo3lVb http://t.co/ft5ZvosOPp
Manoj Pallai
27 Aug 14 22:24:22
RT @dbfarber: FBI probes possible hacking incident at J.P. Morgan $JPM http://t.co/nCmFCJURPA via @WSJ
shel israel
27 Aug 14 22:24:20
RT @dbfarber: FBI probes possible hacking incident at J.P. Morgan $JPM http://t.co/nCmFCJURPA via @WSJ
Dan Farber
27 Aug 14 22:23:10
FBI probes possible hacking incident at J.P. Morgan $JPM http://t.co/nCmFCJURPA via @WSJ
Antonio Costa
27 Aug 14 22:20:56
$JPM NYT: JPMorgan and Other Banks Struck by Cyberattack http://t.co/b0U2qrcIzS
Action Jackson
27 Aug 14 22:18:44
I don't care how any"professionals"in certain areas spin this.The successful #HackAttack on $JPM+others is not #bullish for $banks or the US
Hedge Accordingly
27 Aug 14 22:12:25
$JPM $XLF “@BloombergNews: JPMorgan and four other banks hit by hackers, says U.S. official http://t.co/eEtYEYapQn”
Wall Street News
27 Aug 14 21:45:36
$JPM: FBI Examining Whether Russia Is Tied to JPMorgan Hacking http://t.co/9wl5Kd40XY http://t.co/9RdWXB8lsh
Stock Wire
27 Aug 14 21:44:39
FBI Examining Whether Russia Is Tied to JPMorgan Hacking $JPM http://t.co/ZyViZH4OIx
Gus Fuentes
27 Aug 14 21:35:09
RT @Nobears_Nobulls: Cierre de algunas de las mas destacadas compañías en Walt Street $AAPL $ AIG $FB $GM $GOOG $JPM $NKE @EfektoNoticias h…
Nelson Molina
27 Aug 14 21:33:37
$SPY $AAPL $FB $CERN $JPM $KNDI $MU $LNG $LNG $MIC $WMB $ACT $AGN Get ready for tomorrow. Dog Video Update. Trade ON http://t.co/nNFlDEaVIb
Market Updates
27 Aug 14 21:28:28
$JPM: JPMorgan and Four Other Banks Hit by Hackers, U.S. Official Says http://t.co/Bprc78YW4k http://t.co/UO05eVI3Uc
No bears No bulls
27 Aug 14 21:24:44
Cierre de algunas de las mas destacadas compañías en Walt Street $AAPL $ AIG $FB $GM $GOOG $JPM $NKE @EfektoNoticias http://t.co/lUGuEKvXLO
Hereitfirst
27 Aug 14 21:20:46
trade $MNKD $JPM $TBEV $DRL$WHX $BBY,$TSLA $YHOO $RSO $SPY $VJET $ACRX $DDD $AAPL $NFLX $GOOGL $GOOG $BIDU $AMZN $FB http://t.co/uTZpFW8a4K
Business News Watch
27 Aug 14 21:15:49
$JPM: JPMorgan customers targeted in email phishing campaign http://t.co/I7KGkrcuLN http://t.co/q7lA4vbH4t
Stock Market Monitor
27 Aug 14 21:15:48
$JPM: Associated British Foods plc's Overweight Rating Reaffirmed at JPMorgan http://t.co/0xqKVokdnl http://t.co/lRHO2cNNwW
Market Headlines
27 Aug 14 21:15:47
$JPM: Zurich Insurance Group Ltd Cut to "Neutral" at JPMorgan Chase & Co. (ZURVY) http://t.co/oazF2BLdx9 http://t.co/MES3AaxSRJ
Stock Wire
27 Aug 14 21:13:51
Associated British Foods plc's Overweight Rating Reaffirmed at JPMorgan ... $JPM http://t.co/JvZQqww1QK
Stock Wire
27 Aug 14 21:13:51
Zurich Insurance Group Ltd Cut to "Neutral" at JPMorgan Chase & Co. (ZURVY) $JPM http://t.co/K3EdFMqRdT
Stock Wire
27 Aug 14 21:13:50
JPMorgan customers targeted in email phishing campaign $JPM http://t.co/X3kw11Laiy
libélula
27 Aug 14 21:09:56
RT @CNNMoneyInvest: FBI investigating data breach at JPMorgan http://t.co/o0BzpiTRn2 $JPM via @MattMEgan5
Thudder & Wicks
27 Aug 14 21:09:38
$JPM #JPMorgan and Other Banks Struck by Cyberattack http://t.co/BgNYZ1Bxq7
Thudder & Wicks
27 Aug 14 21:08:00
FBI investigates $JPM #JPMorgan hack attack http://t.co/tI5mGMIgxf
Rickin Majithia
27 Aug 14 21:05:12
RT @AnnmarieHordern: FBI said to be probing whether #Russia tied to JPMorgan hacking $JPM
Aaron Pacy
27 Aug 14 21:01:34
Mr. Nazgûl, Willow Shade from @Ents4EVR, reports show you are investing in logging companies. Is this true? @JPMordor $JPM #AskJPMordor
Patrick
27 Aug 14 21:00:04
10 - Sentiment Shifted Stocks: $BAC $FXI $DBA $JPM $SPY $MBLY $SBUX $DIA $ONE $DOW
stockerblog
27 Aug 14 20:51:50
#JPMorgan $JPM, Four Other Banks Hit by Hackers: U.S. Official http://t.co/kwzlHFmGox
charleytrane
27 Aug 14 20:46:42
RT @billmon1: Tomorrow at 1pm ET $JPM Vice Chaiman Nazgûl takes over @JPMordor to answer your questions for 1 hour. Tweet your Q early usin…
Dylan Schouppe
27 Aug 14 20:38:02
FBI probes possible hacking incident at J.P. Morgan $JPM http://t.co/bixhwzsAUc via @WSJ
skooks
27 Aug 14 20:37:44
RT @billmon1: Tomorrow at 1pm ET $JPM Vice Chaiman Nazgûl takes over @JPMordor to answer your questions for 1 hour. Tweet your Q early usin…
David Riley
27 Aug 14 20:31:09
RT @billmon1: Tomorrow at 1pm ET $JPM Vice Chaiman Nazgûl takes over @JPMordor to answer your questions for 1 hour. Tweet your Q early usin…
Wall Street Monitor
27 Aug 14 20:28:33
$JPM: [video] Will Europe Surprise Investors in 2015? http://t.co/W287P7GlzE http://t.co/OSB9SRIQmA
David Kramer-Urner
27 Aug 14 20:22:03
RT @billmon1: Tomorrow at 1pm ET $JPM Vice Chaiman Nazgûl takes over @JPMordor to answer your questions for 1 hour. Tweet your Q early usin…
				
				
  +Follow July 30, 2013 1:11PM
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