By Scott DiSavino
July 30 (Reuters) - JPMorgan Chase & Co agreed onTuesday to pay $410 million to settle allegations of powermarket manipulation in California and the Midwest, the latest ina series of high-profile inquiries by U.S. federal energyregulators.
The settlement, announced by the Federal Energy RegulatoryCommission (FERC), will allow Chief Executive Jamie Dimon toclose the books on one of several costly run-ins with regulatorsover the past year. It came days after the bank said it wasquitting the physical commodities business.
JPMorgan Ventures Energy Corp, the commodity trading unitthat became one of the biggest U.S. electricity traders with the2008 acquisition of Bear Stearns, agreed to pay a civil penaltyof $285 million and disgorge $125 million for "manipulativebidding strategies" September 2010 through November 2012.
It is the second largest penalty in FERC history.
JPMorgan has already sold the rights to buy the gas and sellthe power from its California plants.
JPMorgan spokesman Brian Marchiony said the settlement would"not have a material impact on our earnings" because the bankhad previously set aside reserves.
FERC said JPMorgan admitted the facts in the agreement, but"did not admit or deny the violations."
Dimon has moved this year to resolve multiple governmentinvestigations and correct problems that regulators have foundat the bank.
The deal also came amid unprecedented political scrutiny ofWall Street's involvement in the raw materials supply chain.Lawmakers have questioned whether banks should own metalswarehouses and power plants, while the U.S. Federal Reservereviews a landmark 2003 decision that first let them tradecommodities.
As expected, the FERC deal did not cite specific traders orJPMorgan's commodities chief Blythe Masters, who spent billionsof dollars over the past five years to build JPMorgan's oil,power, gas and metals business.
JPMorgan had vowed in May to fight the FERC charges anddispute allegations that employees lied or acted inappropriatelyin the matter. But it later entered settlement discussions.
Barclays (BARC)