Federal authorities are launching a criminal investigation to find out whether employees with JPMorgan Chase & Co. attempted to “impede a regulatory investigation into alleged manipulation of power markets.”
The Federal Bureau of Investigation (FBI) and Manhattan-based federal prosecutors are heading up the investigation to determine if employees with JPMorgan committed obstruction of justice. This investigation comes shortly after the Federal Energy Regulatory Commission (FERC) brought a manipulation case against the bank that resulted in a $410 million settlement on July 30. Obstruction of justice is a criminal offence.
Federal authorities have reason to believe that these employees willfully hid certain information, or even lied about information, that would have aided investigators looking into JPMorgan’s “power market deals in California and the Midwest.”
JPMorgan has had a long string of run-ins with legal investigators and federal regulators. The bank is now currently up against a dozen investigations from the feds, as well as foreign governments. The U.S. DOJ in California is investigating alleged civil and criminal violations committed by JPMorgan, as they are alleged to have sold bad mortgage bonds before the economic crisis in 2008.
There was also an investigation into whether JPMorgan’s Hong Kong bureau used the children of “powerful heads of state-owned companies” to win “underwriting business” contracts in China.
The fact that FERC never actually prosecuted anyone in regards to the market manipulation settlement has some lawmakers questioning regulators. The day after the multi-million dollar settlement, Sens. Elizabeth Warren and Edward Markey, Massachusetts Democrats, sent a letter to FERC asking why the bank didn’t have to admit wrongdoing and why no individual executives faced regulatory action.”
“The banking industry has unleashed its powerful army of K-street lobbyist to water-down or eliminate all financial regulation,” according to Peter Mougey, securities litigation attorney at Levin, Papantonio, P.A. “What little regulation that is left, is often not enforced. You don’t have to look far to see there has been virtually no criminal prosecutions despite tremendous evidence of wrongdoing. Regulators need to remain steadfast and staunch in ensuring that big banks are held accountable for their wrongdoings.”
Joshua de Leon is a writer and researcher with Ring of Fire.