JPMorgan Chase (again).
JPMorgan's refusal to turn over e-mails in a U.S. federal probe of potential energy-market manipulation is the latest challenge for Chief Executive Officer Jamie Dimon as the bank faces multiple investigations.
Bloomberg reports that the U.S. Federal Energy Regulatory Commission sued JPMorgan July 2nd to release 25 e-mails in an investigation of possible manipulation of power markets in California and the Midwest by J.P. Morgan Ventures Energy Corp., according to court filings by the Washington-based agency. FERC opened the probe in August after complaints from California and Midwest grid operators that JPMorgan’s bidding practices were abusive, the documents show.'
'He’s got a PR nightmare in front of him', said Paul Miller, a former examiner for the Federal Reserve Bank of Philadelphia and analyst at FBR Capital Markets in Arlington, Virginia. 'It’s another headline risk, which means more regulators, which means over-regulation, which will eventually hit their bottom line'.
FERC, which has pledged to combat manipulation of prices, said JPMorgan’s bidding techniques in California and the Midwest resulted in at least $73m in improper payments. It accused the bank of improperly using attorney-client privilege to withhold or redact 53 e-mails subpoenaed in April.
The company has since released 28 of the e-mails, including a March 14, 2011, exchange between commodities head Blythe Masters and her chief of principal investments, Francis Dunleavy, regarding an update on the California Independent System Operator Inc., one of the complainants in the case.
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