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The bank's energy unit, JP Morgan Venture Energy Corporation, was accused of raising electricity rates in these markets between September 2010 and November 2012 through "manipulative bidding strategies," according to the Federal Energy Regulatory Commission.
JPMorgan (JPM, Fortune 500) will pay $124 million to California residents who overpaid for electricity. Customers in the Midwest will receive $1 million. The rest of the fine will be paid to the U.S. Treasury.
The bank neither admitted nor denied the violations, but said it would work with outside counsel to review its policies and practices in the power business.
The strategies allegedly worked like this: In California, for example, the bank would bid to deliver electricity to a utility the next day at a low price of $30 per megawatt hour. When the next day came, JPMorgan would change its offer to a much higher price of $999 per megawatt hour, assuring the power did not get bought, according to the notice.
Originally posted by wildtimes
GOD DAMN IT!!!
Is there ANYTHING that crime syndicate can do that would FINALLY LAND Dimon and his minions -- or ANY of the major bankers -- in JAIL???
WHY does money buy one out of trouble!!!! I am so fed up with this stupid system
If a "person" (corporation ) has so much money they can buy their way out of EVERY MALFEASANCE - then some OTHER punishment is in order!!!
If I knew that my only punishment would be giving something I have PLENTY of, what is the deterrent?
Strip them of their profits - force them off the stock market - close down all their businesses FOR GOOD.
Those people are monsters.
Originally posted by earthling42
Those who wear a tuxedo, politicians, banksters, CEO of big company's, they are not criminals, they are the smart ones who make money.
Pay millions while making billions, good deal if you ask me.
The bank would bid to deliver electricity to a utility the next day at a low price. When the next day came, JPMorgan would change its offer to a much higher price, assuring the power did not get bought, according to people familiar with the matter. Consumers would then have to compensate the bank for the cost of making the bid, under California's "make whole provision," which requires ratepayers to cover certain costs incurred by energy sellers.
It's not clear how JPMorgan made money on this arrangement, or if it was technically legal.
Any old price dreamed up was valid in the day ahead market.
JPMorgan Ventures Energy has contracts with power generating companies to trade their electricity. FERC said the JPMorgan traders offered to sell electricity at artificially low prices in a “day-ahead” market, so that companies would put their plants on standby mode to quickly generate energy. That would allow JPMorgan to earn fees for putting the power plants on standby mode.
Later, the traders would offer to sell electricity from the plants at higher prices in the market for last-minute energy needs, according to FERC.