U.S. federal regulators temporarily banned JPMorgan Chase & Co's energy-trading arm from a segment of the domestic power market, the first time such a penalty has been imposed for making factual misrepresentations during an investigation into market manipulation.
The move will prevent the U.S. bank from receiving competitive market prices for physical power it sells for six months starting in April 2013, though it will still be able to sell the power at cost.
“That’s serious punishment because, clearly, they can’t profit from that business,” Susan Court, former chief of enforcement at the Federal Energy Regulatory Commission (FERC), said in an interview. JPMorgan, she said, was also the “most notable company” she could think of that had been dealt such a punishment.
JPMorgan's ability to trade derivatives, futures, natural gas and other commodities will not be impacted.
The decision came just months after a major derivatives trading scandal rocked JPMorgan and left it with
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