Shades of Enron: FERC investigations JPMorgan, Barclays and Deutsche Bank for energy manipulation

of prices.


Apparently, they've learned enough so they don't replicate Enron's manipulation, but instead have been manipulating the pricing in a new and different way.


FERC probes JPMorgan over electricity charges
Katarzyna Klimasinska
Published 04:54 p.m., Tuesday, July 3, 2012

http://www.sfgate.com/business/article/FERC-probes-JPMorgan-over-electricity-charges-3682758.php

FERC has issued 15 notices of alleged violations since January 2011 for companies including Barclays PLC, BP PLC, Deutsche Bank AG and Constellation, according to information posted on the agency website. Seven of the cases have been settled, according to the agency.
--

The regulator is examining efforts by J.P. Morgan Ventures Energy Corp., which is based in Houston, to extract excessive payments or above-market prices from California Independent System Operator Inc. and Midwest Independent Transmission System Operator Inc., Thomas Olson, a lawyer in the FERC investigating division, said in a court document. The probe focuses on winning inflated "make-whole" payments, he said.
"Any such improper payments to generators are ultimately borne by the households, businesses and government entities that are the end consumers of electricity," Olson said.
The price-manipulation allegations against JPMorgan's energy-trading unit appear to differ from charges against Enron Corp.'s power traders during the California energy crisis of 2000 and 2001, John Olson, managing partner of Pool Capital Partners LLC in Houston and former energy analyst at Merrill Lynch & Co., said. Enron was accused of driving up prices by persuading operators to shut down, he said.


More details here:

FERC takes aim at Barclays over power market manipulation

http://uk.reuters.com/article/2012/04/11/ferc-barclays-manipulation-idUKL2E8FB52820120411?feedType=RSS&feedName=rbssFinancialServicesAndRealEstateNews

Wed Apr 11, 2012 8:31pm BST

The notice also suggested a heightened focus on so-called
"loss-leader" trading in which a firm may intentionally seek to
sell a physical commodity at a loss in order to reap a much
larger profit on related derivative positions.
The Barclays traders traded day-ahead fixed-price physical
electricity at the Mid-Columbia, Palo Verde, South Path 15 and
North Path 15 to benefit Barclays' IntercontinentalExchange
(ICE) fixed-for-floating financial swap positions in
those markets, FERC said.
After the Constellation settlement, the FERC commissioners
told Reuters the agency was adding staff with more analytical
skills and energy market experience to allow the enforcement
division to delve deeper into trading data and make it tougher
for trading firms to manipulate natural gas and power markets.
In the Barclays case, the FERC staff alleged the bank
assembled substantial physical positions in the opposite
direction of Barclays' fixed-for-floating financial swap
positions and that Barclays flattened those physical positions
in the next-day fixed-price physical markets to move the ICE
daily index settlement up if buying and down if selling.


At what point do we take another direction. The title of this editorial nails it imho:

Let's end this rotten culture that only rewards rogues
The Barclays rate-rigging scandal has once again exposed a world where men and women with little skill and no moral compass can become very rich very fast

http://www.guardian.co.uk/commentisfree/2012/jun/30/will-hutton-barclays-banking-reform