(Reuters) - A unit of German bank Deutsche Bank AG agreed to pay a civil penalty of $1.5 million to settle allegations by U.S. federal energy regulators of power market manipulation in California, according to an order on Tuesday.
In the order, the U.S. Federal Energy Regulatory Commission (FERC) said Deutsche Bank also agreed to disgorge “unjust profits” of $172,645.
The bank neither admits nor denies the violations, according to the order.
FERC’s enforcement unit alleged the Deutsche Bank unit manipulated the California power market by losing money on physical transactions to profit in derivative markets. The bank has disputed those allegations.
The Deutsche Bank action is part of a larger effort by FERC to target electricity trading schemes reminiscent of the market manipulations by Enron and others that led to the California energy crisis more than a decade ago.
FERC has also proposed a record $470 million fine on Barclays Plc for allegedly manipulating power markets in California and a six-month ban on JPMorgan Chase & Co’s energy trading arm from some U.S. power markets.
Reporting By Scott DiSavino and David Sheppard in New York; Editing by Gerald E. McCormick and Nick Zieminski