JP Morgan’s electricity trading desk will essentially be sidelined for 6 months next year because of actions taken by the U.S. Federal Energy Regulatory Commission (FERC). According to the Los Angeles Times, the regulations authority accuses JP Morgan of misrepresenting facts and filing false information in its reporting and communications with the California Independent System Operator known as Caiso.
This all stems from August last year, when FERC started investigating JP Morgan Ventures Energy Corp. for alleged abusive bidding activities and potentially manipulative trading practices in the energy markets. Then, earlier this year in July, FERC sued JP Morgan because it had refused to turn over internal emails FERC had requested during its investigations.
Of course JP Morgan officials deny any wrong-doing, excusing any reporting deficiencies as inadvertent mistakes that were made in “good faith.” But in its decision, FERC states “no showing of the respondent’s intent or mindset is necessary in order to demonstrate that a violation” has occurred.
So here we have a regulatory agency that has the integrity and courage to stand up to the banking giants when they see clear violations and market manipulation. If only the CFTC would take notice. In their 4+ years of investigating the alleged silver market manipulation by JP Morgan, nothing has resulted.
In his letter to subscribers, Ted Butler included the following:
While we hear excuses from the CFTC about the need to prove intent before bringing charges of manipulation against JPMorgan in silver, FERC insisted that intent was a side issue. FERC’s got it exactly right, in my opinion. If someone is messing with the market, there is no need to pussy foot around intent; stop the messing around first and then sort out the details later. We can decide in time if JPMorgan is manipulating silver intentionally or by accident; the important point is to first stop the manipulation. Not every homicide is premeditated and to be prosecuted as murder one; some homicides are manslaughter and not premeditated. That doesn’t mean we tolerate people killing people if the intent isn’t clear. Likewise, JPMorgan is clearly manipulating the price of silver by virtue of their concentrated short position and status of being the dominant seller of new short contracts. First the CFTC should make them stop; then charges can be decided upon.
But then again, there aren’t any FERC members within the inner circle of elite central planning known as the Plunge Protection Team.