JPMorgan Chase & Co. (NYSE:JPM) has reached a settlement agreement with regulators in connection with accusations that it manipulated energy rates. The bank’s energy division, JPMorgan Venture Energy Corporation, will pay $410 million to settle those accusations, reports CNN Money’s Maureen Farrell.

JPMorgan

JPMorgan Chase settles the charges

The Federal Energy Regulatory Commission said JPMorgan Chase & Co. (NYSE:JPM) raised electricity rates in the Midwest in California between September 2010 and November 2012. Regulators said the bank used “manipulative bidding strategies” to do it.

Regulators said JPMorgan Chase & Co. (NYSE:JPM) will pay $124 million to customers in California who paid too much for electricity and $1 million to customers in the Midwest who overpaid. The remainder of that fine will be paid to the U.S. Treasury.

JPMorgan Chase has neither admitted nor denied that it did anything wrong, although it did say it would consult independent counsel as it reviewed its policies in the energy business.

JPMorgan Chase’s alleged strategy

According to regulators, JPMorgan Chase & Co. (NYSE:JPM) was able to get tens of millions of dollars at rates that were much greater than market prices. They said the bank would make a very low bid deliver electricity to one of the utility companies the following day but then dramatically raise the price when that day came if the power wasn’t purchased. Then power grid operators then had to pay the bank to cover the cost of making the bid because of a law requiring ratepayers to pay for some costs energy sellers incur.

Other banks also fined

Regulators also fined other banks for allegedly using similar strategies when selling power Deutsche Bank AG (ETR:DBK) (FRA:DBK) (NYSE:DB) and Barclays PLC (NYSE:BCS) (LON:BARC) both faced similar fines recently. They upheld the $453 million fine imposed on Barclays earlier this month. The bank said it would fight the fine.