JPMorgan Chase’s $410 million trading-manipulation settlement

JPMorgan’s $410 Million FERC Settlement
July 30, 2013
http://www.businessweek.com/articles/2013-07-30/jpmorgans-410-million-ferc-settlement-is-dimon-waving-the-white-flag

There are several ways to read JPMorgan Chase’s $410 million trading-manipulation settlement with the Federal Energy Regulatory Commission.

… That announcement came just three days after a congressional hearing looked at whether large banks are using their ownership of metals and other raw materials to manipulate markets with the effect of driving up prices on such items as soda and beer cans.

Regulators Near Settlement With JPMorgan Chase
July 30, 2013
http://www.npr.org/templates/story/story.php?storyId=206884490

Nancy Saracino is general counsel for the California Independent System Operator which runs California’s energy grid. She says in one scheme JPMorgan would offer very cheap prices for its energy during late night hours.

NANCY SARACINO: So our market would say, great, let’s use those units to generate electricity. And then after midnight, the price would all of a sudden skyrocket up 1,000 times the price and so our market would say, hey, wait, we no longer want your units, please stop generating, but because these are old power plants that take a long time to slow down and we would be stuck paying them for that time.

Saracino calls it a vindication for them and for market participants who play by the rules.

related:
http://www.publicbankinginstitute.org

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