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Justice Probing JPMorgan Energy Manipulation,


Business  (tags: law, crime, corruption, americans, abuse, ethics, GoodNews, society, safety, usa, americans, business, consumers, corporate, corruption, cover-up, dishonesty, economy, energy, finance, investments, investors, lies, money, investing, usa )

JL
- 368 days ago - citizenvox.org
News that the US Dept of Justice is investigating JPMorgan's energy trading business comes after the recent Federal Energcy Regulatory Commission (FERC) settlement with JPMorgan, and means the company and key executives might not be off the hook.



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JL A. (275)
Tuesday August 27, 2013, 1:30 pm

August20
Justice Probing JPMorgan Energy Manipulation

By: Tyson Slocum

News that the US Dept of Justice is investigating JPMorgan‘s energy trading business comes after the recent Federal Energcy Regulatory Commission (FERC) settlement with JPMorgan, and means the company and key executives might not be off the hook. Remember that, in the biggest market manipulation case since Enron, FERC only fined JPMorgan $285 million, or 1.3% of the company’s 2012 profit, and ignored its Enforcement Staff request to sanction Blythe Masters and other key JPMorgan execs for giving “false and misleading statements” under oath. FERC’s failure to hold JPMorgan accountable for manipulating energy markets allowed the company’s reps to boast to the Wall Street Journal that the FERC settlement was a “victory” for the company. We suspect that FERC may have gone easy on JPMorgan in exchange for the company making an announcement days before the settlement that it would exit the commodity business.

If true, this sets a dangerous precedent. Reducing penalties & sanctions against JPMorgan in exchange for its selling its business provides the company with a valuable windfall: they are free to sell, at a profit, a business involved in market manipulation. In contrast, a FERC action revoking the subsidiary’s market-based rate authority would punish the company and reduce the value of its holdings – a fitting action for manipulating markets and harming consumers. And allowing key executives – such as Blythe Masters, JPMorgan’s head of Global Commodities, whom investigators earlier accused of making “false and misleading statements” under oath – to escape sanction enables her and others to trade commodities and potentially manipulate markets at another firm.

The weak settlement is particularly troubling because FERC’s enforcement staff recommended a civil fine and profit disgorgement totaling $1 billion. So it’s welcome news that DOJ may agree that FERC’s enforcement is inadequate. It’s reminiscent of the 2010 and 2011 DOJ anti-trust actions against Morgan Stanley and Keyspan for electricity manipulation, resulting in a $12 million fine for Keyspan and a payment of $4.8 million by Morgan Stanley.

But the DOJ must also examine whether Blythe Masters violated criminal laws against making false statements and committing perjury. And if it turns out that Ms. Masters committed perjury and made false statements, then JPMorgan violated the terms of its recent deferred prosecution agreement in which the company pledged it would respond “truthfully and completely” to subpoenas or investigative demands by other government agencies. The deferred prosecution agreement, by the way, was to settle anti-trust violations related to JPMorgan’s “bid-rigging” of municipal bonds.

FERC failed in its enforcement action to protect consumers and send a message to corporate wrongdoers. Let’s hope the Dept of Justice makes it right.

Tyson Slocum is Director of Public Citizen’s Energy Program.
 

Peggy A. (0)
Tuesday August 27, 2013, 1:45 pm
noted.
 

Kit B. (276)
Tuesday August 27, 2013, 2:14 pm

As I understand this that $285 million will be paid to the US Treasury while another $125 million is paid directly to rate payers in California. In paying the fines JP Morgan was not forced to admit to wrong doing. Leaving the public a little bit pregnant, the rate fee penalties will barely be noticed and JP Morgan is not held to any criminal charges. Proving once again the bandits have paid well for the ballots and the outcome and are not really held liable for wrong doing. Welcome to America, where corporation can get away with anything.
Thanks J L
 

JL A. (275)
Tuesday August 27, 2013, 2:25 pm
You are welcome Kit.You cannot currently send a star to Kit because you have done so within the last day.
 

JL A. (275)
Tuesday August 27, 2013, 3:36 pm
You cannot currently send a star to Terry because you have done so within the last day.
 

GGmaSheila D. (164)
Tuesday August 27, 2013, 4:37 pm
Hope the DOJ sticks it to them...wishful thinking I know, but we all need dreams. Thanks.
 

JL A. (275)
Tuesday August 27, 2013, 4:41 pm
You are welcome GGma. You cannot currently send a star to GGma Sheila because you have done so within the last day.
 

Roger Garin-michaud (61)
Tuesday August 27, 2013, 5:48 pm
noted, thanks
 

JL A. (275)
Tuesday August 27, 2013, 5:55 pm
You are welcome Roger
 

BnKatieNOMESPLE D. (81)
Tuesday August 27, 2013, 10:45 pm
Oh This Is Interesting!! Thank You JLA
 

Jonathan Harper (0)
Wednesday August 28, 2013, 4:40 am
noted
 

JL A. (275)
Wednesday August 28, 2013, 9:07 am
You are welcome Bill and Katie.
You cannot currently send a star to Bill and Katie because you have done so within the last day.
 
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