Report: Justice Department launches probe of JPMorgan energy practice

The Justice Department is launching an investigation into whether JPMorgan Chase manipulated energy markets just weeks after the bank settled similar allegations with federal regulators, according to press reports.

Citing people familiar with the probe, The Wall Street Journal reports that the DOJ opened its inquiry as JPMorgan and the Federal Energy Regulatory Commission (FERC) were putting the finishing touches on a $410 million agreement to set aside market manipulation charges.

From the Journal:

The probe, according to the people, is being handled by U.S. Attorney Preet Bharara, who this month accused two former J.P. Morgan employees who worked alongside a former trader known as the "London whale" of hiding losses on runaway bets in 2012 that cost the bank more than $6 billion.

In the energy investigation, Mr. Bharara will examine some of the same issues at the center of the FERC case, these people said. It isn't known whether the investigation is civil or criminal. The U.S. attorney's office for the Southern District of New York declined to comment.

JPMorgan declined to comment to The Hill. The DOJ did not immediately respond to a request for comment.

The move by the department would underscore some of the legal problems JPMorgan is confronting. The Journal noted that the bank already is facing “at least six other investigations.”

Rep. Dan Kildee (D-Mich.) cheered the prospects of a DOJ investigation. The Michigan Democrat urged such action in a May letter to Attorney General Eric Holder regarding JPMorgan’s energy market practices.

“It is important that the Justice Department send a strong signal to the markets that all bad actors are held accountable for their irresponsible actions,” the May 29 letter said.

The $410 million settlement between the bank and FERC last month addressed those manipulation allegations, which were said to occur between 2010 and 2012 in California and the Midwest.

JPMorgan admitted to the “facts forth set in the agreement,” FERC said at the announcement of the settlement. The bank didn’t admit to or deny any violations.