Traders at J.P. Morgan Ventures Energy Corporation allegedly manipulated markets between September 2010 and November 2012 in California and the U.S. Midwest. Hoewever, the company did not admit to any breach of conduct as part of the U.S. Federal Energy Regulatory Commission settlement.
Under the agreement, JPMorgan will pay a $285 million civil penalty to the U.S. Treasury and give back $125 million in unjust profits to ratepayers.
Both the Californian and the midwestern electricity grid operators notified FERC on several occasions about JPMorgan's practices. FERC investigators accused JPMorgan traders of creating "artificial conditions” to force the grid operators to pay premiums on power plants that were usually out of the money in the marketplace.
The news comes as JPMorgan tries to unload its physical commodities business, although it will still trade derivatives and precious metals.
JPMorgan shares shed 24 cents to $55.45 early Tuesday afternoon.