On March 14, 2011, Blythe Masters, head of JPMorgan Chase's global commodities group, asked one of her top deputies why California power officials were making ominous inquiries into the bank's arcane and lucrative business of selling electricity. Five months earlier, Masters had been given a spreadsheet predicting that this line of business would generate profits of $1.5 billion to $2 billion by 2018.
Francis Dunleavy, the Houston-based executive in charge, replied in an email that he would handle the matter, but added that "it may not be pretty."
On Tuesday, JPMorgan Chase agreed to a record $410 million settlement of accusations by government regulators of manipulating electricity prices in California and the Midwest.