U.S. regulators and J.P. Morgan Chase are close to a monster settlement over allegations that the banking giant tampered with electricity markets in California and the Midwest, the Wall Street Journal reports.
Sources told the Journal the deal could come in close to a staggering $1 billion, the largest payout in the history of the Federal Energy Regulatory Commission (FERC), which overseas power trading markets.
JPM and FERC, the little regulator that could, are reportedly exchanging drafts of an agreement.
Although it seemed JPM might originally take the matter to court, sources told the Journal the bank is working quickly to finish the deal so they can gear up for even more regulatory hoopla in the wake of the London Whale debacle.
The filings associated with the allegations describe how traders rigged their bidding in order to be eligible for “make-whole” payments that would cover trading losses and generate a healthy profit, according to the Journal.