September 20, 2012 / 4:12 PM / 7 years ago

US watchdog says JPMorgan unit may have broken power market rules

NEW YORK, Sept 20 (Reuters) - U.S. power market regulators challenged a unit of JPMorgan Chase & Co on Thursday to show that it did not violate federal regulations by submitting misleading information and omitting facts in dealings with the regulator and California’s electricity grid operator.

The U.S. Federal Energy Regulatory Commission (FERC) on Thursday said the bank may have violated regulations under the Federal Power Act by failing to comply with a data request in a timely manner, among other allegations.

Further to that, the unit, J.P. Morgan Ventures Energy Corp, is ordered by FERC to show why “its authorization to sell electric energy, capacity and ancillary services at market-based rates should not be suspended.”

The bank has 21 days to respond to the show-cause order.

A JP Morgan spokeswoman declined to comment “because we haven’t seen the full order yet,” she said in an emailed statement.

This order is separate from an investigation launched by FERC earlier this year as to whether JP Morgan manipulated electricity prices in California and the Midwest.

On Monday, the JP Morgan unit filed a separate complaint with FERC against the California power grid operator, claiming the operator owed it $3.7 million for the dispatch of some power generation.

In the past year, FERC has increased its investigations into power market manipulation allegations against banks, including Deutsche Bank and Barclays PLC.

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