JPMorgan Chase Faces Federal Probe Over Energy Trading 'Schemes'

JPMorgan facing federal action over power plant
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Federal investigations are nothing new for JPMorgan Chase (JPM), but the latest government inquiry into the behavior of the country's largest bank by assets bears uncomfortable similarities to one of the most notorious chapters in the history of American business.

The New York Times reports on the contents of a confidential government memo sent to the bank in March, "warning of a potential crackdown by the regulator of the nation's energy markets":

Government investigators have found that JPMorgan Chase devised "manipulative schemes" that transformed "money-losing power plants into powerful profit centers," and that one of its most senior executives gave "false and misleading statements" under oath.

Connoisseurs of corporate scandal -- and probably every investor who remembers the start of this century -- will immediately think of Enron, the energy market-manipulating giant that went from six-time consecutive winner of Fortune's "most innovative" award (1996-2001) to what was at the time the largest bankruptcy in U.S. history.

The "schemes" in question reportedly originated in Houston, where JPMorgan traders under pressure to make big returns are alleged to have swindled California and Michigan out of $83 million by presenting deceptive energy prices. The bank says everything was on the up-and-up.

There's more alleged wrongdoing at the bank, including improper collection of credit card debt and silence over suspicious trading by Bernie Madoff, the biggest Ponzi schemer in history. The Times also says JPMorgan CEO Jamie Dimon, who is not personally under government scrutiny, met with prosecutors and the FBI this week to discuss the infamous "London Whale" case, a massive trading loss that prompted accusations of a cover-up and led to a blistering Senate report.

For more on this story, as well as other developments moving the market today, check out the DailyFinance Market Minute video below.

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mastercraftmyers

Chase Bank
I will never Bank at this Bank EVER!!!!!!!!!
They have sucked my last penny.

May 06 2013 at 12:23 PM Report abuse rate up rate down Reply
Gumby

We will not be using guns much longer. we will be using sonic guns... it is new and experimental , I think.. I am being used as a guinea pig or something... Sonic guns is already used in riot control instead of tear gas. It is already happening.. You will not like when someone is pointing a sonic gun at you. You will not hear any bang or loud noise... It will disorient you and give you weird headaches and bodyaches.. I got shot by sonic guns almost everyday. Of course, I am still alive but I suffer greatly.... Dont laugh! I know that it will become so common in the foreseeable future. Guns and bullets? No more! Aspirin or Advil wont work for your headaches or bodyaches from sonic guns.. You cannot see or hear where it comes from. It canbe anywhere and it can go through walls. I am not kidding you

May 05 2013 at 12:47 AM Report abuse rate up rate down Reply
r121676

They will get their wrist slapped again when they should be jailed. Seems like they have all our politicians on their payroll.

May 04 2013 at 3:33 PM Report abuse rate up rate down Reply
mattshank

I am a conservative and staunch supporter of capitalism, but not at any cost. These financial institutions that are engageing in questionable activity should have the book thrown at them. People and companies need to play by the rules and do business straight up, or go straight to jail IMO. Ethics anyone?

May 04 2013 at 2:50 PM Report abuse +1 rate up rate down Reply
arthlop1

Oh my God not JPMorgan Chase. They would never do such a thing, AGAIN. This is why I left these banks and joined a Credit Union. I happen to know my credit union was invaded by a Federal investigation last year and came out with a 98.8. I know all banks get checked but JPMorgan Chase has been caught several times making all that Bonus money for themselves. SCUMBAGS.

May 04 2013 at 2:13 PM Report abuse rate up rate down Reply
spstevens58

SO, why exactly do we trust them to police themselves?

May 04 2013 at 12:28 PM Report abuse rate up rate down Reply
thundarbp

screw me once ok screw me twice watch out . only in america can we do it three times with no jail time and keep the profits.

May 04 2013 at 11:49 AM Report abuse +3 rate up rate down Reply
clublodi

They should take these corprate thieves fortunes away from them. When they are covicted of thier crimes thier entire fortunes should be taken from them to repay those they have swindled..Thier families should be left with nothing or there is no disinsentive to do the crime. If you told me I would have to go to jail for 5 years but my family would be set for generations and I would have my stolen fortune waiting for me when I got out. Thats a trade I would make everyday.

May 04 2013 at 11:10 AM Report abuse +2 rate up rate down Reply
otiss5

It will be decided to take away the worst offenders name place close employee of the month parking spaces.

May 04 2013 at 11:09 AM Report abuse +1 rate up rate down Reply
inkbubba100

One of Obama biggest contributors and one of his biggest investments

May 04 2013 at 10:45 AM Report abuse +2 rate up rate down Reply