Newsgroup: it.politica.internazionale
Titolo: JPMorgan Accused of Energy-Market Manipulation by U.S. Agency

http://www.bloomberg.com/news/2013-07-29/jpmorgan-accused-of-energy-market-manipulation-by-u-s-agency.html
 
 
JPMorgan Accused of Energy-Market Manipulation by U.S. Agency
By Brian Wingfield & Dawn Kopecki - Jul 30, 2013 12:18 AM GMT+0200
 
JPMorgan Chase & Co. (JPM) manipulated power markets in California and 
the Midwest from September 2010 to June 2011, obtaining tens of millions 
of dollars in overpayments from grid operators, the U.S. Federal Energy 
Regulatory Commission alleged today.
 
The agency said in a Notice of Alleged Violations that it had 
preliminarily determined a JPMorgan trading unit had engaged in eight 
manipulative bidding strategies.
 
The New York-based bank has agreed to sanctions including a fine of 
about $400 million in a settlement that may be announced as early as 
tomorrow, according to a person familiar with the case who asked not to 
be identified because the terms aren’t yet public. Other sanctions may 
include forfeiting profits, this person said.
 
The case marks another setback for the biggest U.S.-based bank, which 
sailed through the 2008 financial crisis without a single quarterly 
loss. Last year JPMorgan lost more than $6.2 billion from wrong-way 
derivatives bets placed by traders in London. The incident prompted a 
U.S. Senate investigation, the departure of two senior executives and a 
debate over whether Chief Executive Officer Jamie Dimon should keep his 
chairman role. In May shareholders re-elected him as chairman.
Physical Commodities
 
JPMorgan said July 26 it may sell or spin off its physical commodities 
business including energy trading, three days after a congressional 
hearing examined whether banks are using their ownership of raw 
materials to manipulate markets.
 
Commodities chief Blythe Masters oversees the unit, J.P. Morgan Ventures 
Energy Corp. The wholly owned subsidiary trades and holds physical 
commodities, including agricultural products, metals and energy, as well 
as derivatives.
 
The FERC in November revoked a JPMorgan energy-trading unit’s right to 
trade power for six months after accusing the firm of providing 
misleading information to regulators. The suspension, which took effect 
in April, marked the first such sanction for an active market participant.
 
The FERC staff said in today’s allegations, announced by e-mail, that 
the bank’s energy-trading unit was involved in five market-gaming 
strategies in California from September 2010 to June 2011. The company 
engaged in three gaming strategies in the Midwest from October 2010 to 
May 2011, the staff said.
 
Bidding Practices
 
Investigators have suspected that bidding practices by JPMorgan traders 
improperly got grid operators to overpay for electricity from power 
plants the bank controls, Thomas Olson, a FERC attorney in the agency’s 
enforcement office, said in a July 2012 filing with the U.S. District 
Court for the District of Columbia.
 
In wholesale electricity markets, buyers and sellers negotiate prices 
based on supply and demand. There are costs associated with making a bid 
to provide power, including fuel and starting up the generator, 
according to Steven Greenlee, a spokesman for the California Independent 
System Operator, the state’s grid operator. If a sale of electricity 
doesn’t yield enough revenue for the generator to recover its startup 
costs, the grid operator will issue the company a “make whole” payment, 
he said in an e-mail.
 
Grid Operator
 
After examining JPMorgan’s bidding practices, FERC staff told JPMorgan 
in March that it appeared the company’s traders may have violated agency 
and grid-operator rules, the company said in a May regulatory filing. It 
also said the regulator’s staff intended to bring an enforcement case 
against the trading unit and that its personnel and two subsidiaries may 
face claims stemming from a probe into bidding practices.
 
Since 2011, the FERC has revealed at least 13 probes of energy-market 
gaming, including investigations of trading units at Deutsche Bank AG, 
Barclays Plc (BARC) and JPMorgan.
 
“There are big profits that are made in these markets,” Susan Court, a 
former director of the agency’s enforcement office, said in a July 18 
phone interview. “FERC’s mandate is to make sure those markets are not 
defrauded.”
 
FERC Chairman Jon Wellinghoff has stepped up scrutiny of corporations as 
the agency wields policing powers that were expanded in the wake of 
Enron Corp.’s 2001 collapse. The regulator on July 16 ordered Barclays 
and four of the company’s former traders to pay a combined $487.9 
million in fines and penalties for engaging in what the agency said was 
a scheme to manipulate energy markets in the Western U.S. from 2006 and 
2008.
 
Other Cases
 
Deutsche Bank agreed on Jan. 22 to pay $1.6 million to resolve FERC 
claims that an energy-trading unit manipulated markets in 2010. The 
Frankfurt-based bank didn’t admit or deny wrongdoing.
 
In the Barclays case, the FERC levied $453 million in civil penalties 
against London-based banks and four its ex-traders. It also directed the 
lender to give up $34.9 million in profits. The bank has vowed to fight 
the penalties.
 
The FERC accused one former Barclays employee, Scott Connelly, of 
heading a market-gaming scheme, fining him $15 million. It fined three 
other former traders $1 million each.
 
“FERC appears to be willing to fine individual traders in some of these 
larger enforcement cases,” said Carrie Allen, an energy attorney with 
Akin Gump Strauss Hauer & Feld LLP. “It’s a pretty standard 
prosecutorial tactic that FERC is embracing.”
 
The agency fined ex-Amaranth Advisors LLC trader Brian Hunter $30 
million in 2011, ruling he manipulated the price of contracts on the New 
York Mercantile Exchange in 2006 while boosting the value of financial 
derivatives. A U.S. Court of Appeals ruled in March that FERC lacked the 
jurisdiction for the fine.
 
Public Citizen
 
“I do not see a positive role in the way that these banks are operating 
in these markets,” Tyson Slocum, director of the energy program at 
Public Citizen, a Washington-based consumer-advocacy group, said in a 
phone interview. “I don’t understand the value added to reliability, to 
efficiency.”
 
The FERC should use its authority under the Federal Power Act to ensure 
that utility customers are refunded for market violations, he said.
The FERC in March 2012 reached a then-record $245 million settlement 
with Constellation Energy Group Inc. over alleged energy trading 
violations in New York. Constellation didn’t admit any wrongdoing.
-- 
Namib
.....
αἱ ψυχαὶ ὀσμῶνται καθ᾽ Ἅιδην (Eraclito)

 
http://www.bloomberg.com/news/2013-07-29/jpmorgan-accused-of-energy-market-manipulation-by-u-s-agency.html
 
 
impossibile il Libero Mercato è la Perfezione, nessuno lo può controllare, sono solo gli illusi comunisti che vorrebbero farlo e perseguitano gli onesti banksters che non manipolano un bel niente, ma sono liberi operatori in libero mercato.