FBI working with U.S. Attorney.
Bloomberg News reports that a Justice Department investigation of JP Morgan's energy-trading practices is examining whether criminal laws were violated by individuals, according to a person briefed on the matter.
The FBI is working with U.S. Attorney Preet Bharara, said the person, who asked not to be named because the inquiry isn’t public.
Bharara’s inquiry, reported by the Wall Street Journal and Bloomberg News earlier this week, looks at conduct at issue in the bank’s $410m civil settlement last month with the Federal Energy Regulatory Commission. The FERC had accused the bank of manipulating power markets in California and the Midwest.
It’s the second criminal probe of the bank to emerge this month, after the lender disclosed on August 7th that the U.S. Attorney’s Office in Sacramento, California, opened a separate criminal inquiry into the firm’s mortgage-bond practices. Investigators in that case told the bank in May that they have preliminarily concluded the company violated civil laws, JP Morgan said in the disclosure.
JP Morgan’s energy-trading unit engaged in 12 bidding strategies in wholesale energy markets from September 2010 to November 2012 that resulted in tens of millions of dollars in overpayments from grid operators, the FERC said while announcing the settlement on July 29th. It didn’t bring claims against any individuals.
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