JPMorgan Chase Manipulation Scandal Raises Specter Of Enron

Posted: 07/03/2012 12:59 pm Mark Gongloff

Did Jamie Dimon break a mirror or something? Because his bank, JPMorgan, once less fallible than the Pope, is suddenly having a terrible run of luck.

The bank's stock price was hit by a series of blows on Tuesday -- including a fresh scandal that raised the specter of Enron -- even as the rest of the stock market rallied.

The biggest blow was probably a New York Times story that the bank pushed mutual-fund clients into its own brand of mutual funds, which performed poorly and charged high fees. The story might make you think that maybe JPMorgan Chase cares only about money and not its clients! And you'd be right.

But wait, there was more: The bank is also the subject of a probe by the Federal Energy Regulatory Commission into charges that it manipulated power markets in California and the Midwest, the Financial Times writes:

The electricity investigation involves whether JPMorgan's bidding strategies extracted "inflated" or "excessive" payments from two wholesale power markets serving California and several Midwest states. The bank's commodities business owns or has rights to output from several electric generators.

If charges of power-market manipulation sound familiar to you, then you win the prize for remembering the Enron scandal.

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