A class action lawsuit has been filed against J.P. Morgan Chase & Co, the largest U.S. bank by assets, alleging it engaged in racketeering and manipulation of California's electricity market.
The lawsuit, filed in California federal court on Monday, accuses the firm of violating the Racketeer Influenced and Corrupt Organizations Act (RICO) when it sold power from several gas plants in the state between 2010 and 2012.
"(J.P. Morgan) resorted to illegal market manipulation to turn the inefficient, money-losing generators into cash cows," said the lawsuit, which was brought by three California ratepayers on the behalf of retail power consumers in the state.
The plaintiffs seek damages for California residents who paid higher electricity prices because of J.P. Morgan's alleged actions.
J.P. Morgan did not immediately respond to a request for comment on the case.
The lawsuit follows J.P. Morgan's settlement of similar allegations by the Federal Energy Regulatory Commission in 2013. The company agreed to pay a $285 million civil penalty and to pay back $124 million to California power consumers.
In the FERC settlement agreement, J.P. Morgan did not admit to violating the law.
The class action lawsuit said FERC had limited authority to seek funds for California residents affected by the alleged manipulation. The damages suffered by California ratepayers from the "illegal market manipulation," the complaint added, were substantially higher than the amount recouped by FERC.
The case is Woolsey et al v. J.P. Morgan Ventures Energy Corporation et al, U.S. District Court for the Southern District of California, No. 15-cv-00530.
