News Column

JPMorgan Blasted Over Energy Market Manipulation

May 4, 2013
JPMorgan, energy markets

New York (dpa) - Financial investigators in the United States have accused the country's biggest bank, JPMorgan Chase & Co, of a range of potentially fraudulent acts, including using manipulation to increase profits in the energy market, two US newspapers reported Friday.

The New York Times, citing a confidential government document, said investigators accused the Wall Street institution of using "manipulative schemes" to turn "money-losing power plants into powerful profit centers."

The document sent to the bank in March warned that federal regulators might get involved in the energy market as a result of the alleged manipulation, the Times said.

The US Office of the Comptroller of the Currency, among seven other regulators, is also investigating JPMorgan for inaccuracies in its accounts on credit card customers and whether the bank failed to report suspicious transactions by convicted billion-dollar fraudster Bernard Madoff, the Times as well as The Wall Street Journal reported.

JPMorgan Chase has been under investigation for months for questionable business practices and has seen its reputation as one of the best-managed banks in the world tarnished.

The news reports cited financial authorities accusing manager Blythe Masters and other JPMorgan executives of making "false and misleading statements" under oath.

Masters is considered the creator of credit default swaps, with which investors can insure themselves against defaulting loans. The failure of these financial instruments contributed to the 2008 financial crisis.

JPMorgan Chase itself vehemently denied the accusations, saying that neither Masters nor any other employee had lied or committed any acts of fraud, the Times said, citing a bank spokeswoman.

The bank has until mid-May to fully respond to regulators.

Source: Copyright 2013 dpa Deutsche Presse-Agentur GmbH

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