JPMorgan may have broken U.S. power market rules: watchdog
09/20/2012| 06:43pm US/Eastern
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U.S. power market regulators challenged a unit of JPMorgan Chase & Co (>> JPMorgan Chase & Co.) on Thursday to show that it did not violate federal regulations by submitting misleading information and omitting facts in dealings with the regulator and California's electricity grid operator.
U.S. power market regulators challenged a unit of JPMorgan Chase & Co (>> JPMorgan Chase & Co.) on Thursday to show that it did not violate federal regulations by submitting misleading information and omitting facts in dealings with the regulator and California's electricity grid operator.
The U.S. Federal Energy Regulatory Commission (FERC) on Thursday said the bank may have violated regulations under the Federal Power Act by failing to comply with a data request in a timely manner, among other allegations.
Further to that, the unit, J.P. Morgan Ventures Energy Corp, is ordered by FERC to show why "its authorization to sell electric energy, capacity and ancillary services at market-based rates should not be suspended."
The bank has 21 days to respond to the show-cause order.
JP Morgan said it had made an "inadvertent factual error in papers related to discovery and promptly informed the commission of this mistake."
"Such an inadvertent error does not justify revoking JP Morgan's market-based rate authority," said Jennifer Zuccarelli, a spokeswoman for the bank.
FERC says this order is separate from an investigation launched earlier this year as to whether JPMorgan manipulated electricity prices in California and the Midwest.
As part of that investigation, FERC claims that JP Morgan did not release emails that would have
On Monday, the JP Morgan unit filed a separate complaint with FERC against the California power grid operator, claiming the operator owed it $3.7 million for the dispatch of some power generation.
In the past year, FERC has increased its investigations into power market manipulation allegations against banks, including Deutsche Bank (>> Deutsche Bank AG) and Barclays PLC (>> Barclays PLC).
(Reporting By Jeanine Prezioso; editing by Andrew Hay)
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