JP Morgan’s energy unit has agreed to pay $410 million to settle charges from The Federal Energy Regulatory Commission (FERC), the top US energy regulator, that it manipulated energy markets.
FERC agency alleged JPMorgan’s trading practices drove up prices for electricity, mainly in California and the Midwest.
JP Morgan’s energy unit has agreed to pay $410 million to settle charges from The Federal Energy Regulatory Commission
The fine is the second largest penalty in FERC history.
The bank did not admit any wrongdoing as part of the settlement.
JPMorgan spokesman Brian Marchiony said the settlement would “not have a material impact on our earnings” because the bank had previously set aside reserves for the case.
Under the deal, the bank must also make annual reports to the commission for three years detailing its power business in the United States.
JPMorgan has already sold the rights to buy the gas and sell the power from its California plants.
Oil prices fell sharply on Wednesday as economic data from China and Europe sparked worries about global demand.
Brent crude for November delivery fell $3.40 to $108.17 a barrel, while US crude settled $3.75 lower at $88.14 a barrel.
In September, Brent crude hit a peak of $117.95, a four-month high.
Analysts said many factors that had pushed up prices, such as tensions between Iran and Israel, had also abated.
“The energy markets realigned themselves to fundamentals last night in dramatic fashion,” said Justin Harper from IG Markets in a note to clients.
Data from China, released on Wednesday, was one of the factors that led to the sell-off in oil and other commodities.
It showed that China’s services sector expanded at a slower pace in September. It came days after government data indicated that manufacturing continues to slow.
China is a major importer of commodities and a slowdown there makes a huge dent in demand.
That coupled with weakness in European economies signaled that there would be plenty of supply.
“US crude plummeted 4.1% through a combination of over-supply and low demand,” said Justin Harper.
“US stockpiles have reached their highest for 15 years.”
Meanwhile, concerns over possible military action between Israel and Iran also eased.