May 3, 2013
New Details on JPMorgan's Electricity Manipulation Prompt Renewed Call for Key Executive’s Termination
If Allegations Prove Correct, Blythe Masters Should Face Criminal Charges, and JPMorgan Should Be Banned From Power Markets
In July 2012, Public Citizen stated that Blythe Masters, head of JPMorgan’s Global Commodities group, should be fired if allegations about her involvement in electricity market manipulation schemes proved true. Today, The New York Times reports, based on its review of a non-public investigative document, that staff at the Federal Energy Regulatory Commission (FERC) claim that Ms. Masters was aware of the company’s manipulation strategies, helped to conceal the schemes and lied to state and federal officials when confronted about the company’s manipulation strategies. If FERC’s reported findings prove true, JPMorgan should terminate Ms. Masters and rescind all bonuses and any other compensation it can claw back under her contract from the time the alleged manipulation and lying occurred.
In addition, if the allegations described in The New York Times article prove to be true, Ms. Masters should face criminal charges for lying under oath, and FERC should permanently revoke the company’s market-based rate authority.
In November 2012, FERC revoked JPMorgan’s market-based rate authority for six months beginning April 1, 2013, because the company provided false information in connection with the investigation into manipulation of the California electricity market. If lying is grounds for a temporary market-based rate revocation, then a finding of guilt on the underlying manipulation scheme should be grounds to permanently ban the company.