* From the Associated Press…
U.S. energy regulators are accusing JPMorgan Chase & Co. of manipulating electricity prices in California and the Midwest in 2010 and 2011.
The Federal Energy Regulatory Commission said in an enforcement notice Monday that the bank used improper bidding strategies to squeeze excessive payments from the agencies that run the power grids in California and the Midwest. […]
FERC’s enforcement staff said its investigation had found improper trading practices were used at the company’s Houston-based subsidiary, JPMorgan Ventures Energy Corp.
The energy unit used five “manipulative bidding strategies” in California between September 2010 and June 2011, and three in the Midwest from October 2010 to May 2011, FERC said. The agency that runs the Midwestern power grid, now called the Midcontinent Independent System Operator, covers all or parts of 15 states and the Canadian province of Manitoba.
* From Bill Daley’s BusinessWeek bio…
Mr. Daley served as Head of Corporate Social Responsibility at J.P. Morgan Chase & Co. from June 28, 2007 to 2010 and served as its Chairman of Midwest Region since May 2004.
I can’t help but wonder if the duties of the bank’s “Corporate Social Responsibility” unit would include making sure that its traders weren’t manipulating energy markets.
* In other news…
A former employee of SAC Capital Advisors’ Chicago office was once part of an “insider trading group” at a rival hedge fund, according to an indictment filed on Thursday against SAC.
A source familiar with the matter said the hedge fund was Citadel. A Citadel spokeswoman said there was no such “insider trading group” at the firm.
Charges filed in U.S. District Court in New York on Thursday against prominent hedge fund manger Steven A. Cohen’s SAC Capital said his former employee, Richard Lee, moved from a firm, identified only as “Hedge Fund A” to SAC, despite a warning that Lee “was known for being part of Hedge Fund A’s ‘insider trading group.’”
The source familiar with the matter said “Hedge Fund A” is Citadel, the Chicago-based firm founded by Kenneth Griffin. Citadel managed roughly $13.3 billion at the end of 2012, according to a regulatory filing. Citadel was one of several hedge funds subpoenaed by federal authorities in 2010 as part of the government’s broader insider trading investigation.
Lee worked at Citadel from 2006 until he was fired in 2008, according to a spokeswoman for the firm.
* More response from Ken Griffin’s Citadel…
Citadel, which has not been accused of any wrongdoing, defended itself against the allegation.
“Citadel does not have, and never has had, an ‘insider trading group,’” it said. “Citadel has strict rules against, and oversight designed to prevent, insider trading. Any suggestion to the contrary is baseless and without merit.”
Citadel elaborated on its reasons for firing Lee, which it said had nothing to do with insider-trading. Instead, the hedge fund said, Lee had violated its policies on internal transfers of positions.
“Mr. Lee’s actions would have impacted only his potential future compensation,” Citadel said. “Within hours, Mr. Lee’s misconduct was reported to Citadel management. Mr. Lee was immediately terminated.”
* And now for some good news. I sent this e-mail yesterday to Republican gubernatorial candidate Bruce Rauner’s spokesman. Rauner, as you may know, sits on the Civic Committee’s board…
Did Bruce ever contact any bond credit rating agency to ask them, suggest to them, etc. to downgrade Illinois’ bond rating? Did he ever contact any credit rating agency even to speak with them about Illinois’ bond ratings?