The nation’s top energy regulator Monday formally accused JPMorgan Chase of manipulating energy markets, foreshadowing a multimillion-dollar settlement that is expected as early as this week, according to people briefed on the matter.
The action by the Federal Energy Regulatory Commission is largely a formality ahead of the settlement — a deal that is expected to help JPMorgan avert a clash over accusations that the bank orchestrated trading strategies to turn inefficient power plants into profit centers, people briefed on the matter said.
From the outset, JPMorgan, which declined to comment Monday, has denied any wrongdoing. The bank has also mounted a fierce defense of the top executives who supervised the traders in Houston accused of devising the trading strategies.
The accusations against JPMorgan stem from its rights to sell electricity from power plants. The rights come from assets that the bank acquired in the 2008 takeover of Bear Stearns.