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After the announcement of the latest probe by the Department of Justice (DOJ) over the probable manipulation in the energy sector by JPMorgan Chase & Co. (JPM - Analyst Report), the company’s share price went down by 2.74%. This new probe follows the company’s settlement of civil allegations last month with the Federal Energy Regulatory Commission (FERC).

Previously, JPMorgan was charged with the manipulation of electricity prices in California and the Midwest regions. The company had agreed to pay $410 million, without admitting or denying any wrongdoing. Of the total amount, $285 million was the penalty fee and the remaining $125 million was the improper profit that the company allegedly earned. This amount would be returned to the ratepayers of California and the Midwest regions.

Apart from the settlement between JPMorgan and FERC, the DOJ had decided to further scrutinize the energy practices of the company. The case is being investigated by U.S. Attorney Preet Bharara in Manhattan. The U.S. Attorney is expected to probe some similar issues related to the FERC case.

The latest energy probe is expected to add to JPMorgan’s legal woes. The Wall Street biggie is already facing six other inquiries. In May 2012, the DOJ charged the bank of violating the civil securities laws while selling the mortgage-backed securities between 2005 and 2007. Moreover, the DOJ has decided to persist with its probe of the 2012 JPMorgan trading debacle, which cost the bank over $6 billion.  

In the past, many other banks have been charged with energy trading violations. In Mar 2012, Constellation Energy Group Inc. – a subsidiary of Exelon Corporation (EXC - Analyst Report) – agreed to pay $245 million for alleged energy trading violations in New York. Moreover, in Jan 2013, Deutsche Bank AG (DB - Analyst Report) agreed to pay $1.6 million to resolve the FERC’s charges, accusing the former of manipulating the California energy markets in 2010.

Furthermore, earlier this month, the FERC ordered Barclays PLC (BCS - Analyst Report) to pay $488 million in fines and penalties for the alleged manipulation of energy markets in Western U.S. from 2006 to 2008. However, Barclays has decided to challenge the order.

The ongoing probes against JPMorgan are expected to add to its legal expenses, which might dent its financials going forward. Additionally, it might tarnish the company’s image.

JPMorgan currently carries a Zacks Rank #3 (Hold).

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