In a release on July 30, 2013, JP Morgan has agreed to pay a $410 penalty over allegations it manipulated U.S. electricity markets. According to the official release, JP Morgan Ventures Energy Corporation is alleged to have manipulated the electricity market through the company’s bidding activities in California and the Midwest during the period from September 2010 through November 2012.
1. Look at the J.P. Morgan Corporate Responsibility Report. In your opinion, which specific issues listed in the report were violated? (See http://www.jpmorganchase.com/corporate/Corporate-Responsibility/document/jpm_corpresp091912_hires.pdf)
2. Explain what the penalty was in this settlement.
3. Explain this statement listed in the news release, as if you were simplifying it for a classmate. (Include an explanation about who FERC is.): FERC investigators determined that JPMVEC engaged in 12 manipulative bidding strategies designed to make profits from power plants that were usually out of the money in the marketplace.
Wile, R. (2013). JPMorgan Agrees to Pay $410 Million To Settle Electricity Market Probe. Business insider, July 30 (Retrievable online at http://www.businessinsider.com/jpmorgan-ferc-settlement-2013-7#ixzz2aXF8V0YF)