JPMorgan Chase & Co. (JPM) manipulated power markets in California and the Midwest from September 2010 and June 2011, according to allegations unveiled today by the Federal Energy Regulatory Commission.

The bank has agreed to sanctions that include a fine of about $400 million, to settle the investigation in a deal that may be announced as early tomorrow, according to a person familiar with the case who asked not to be identified because the terms aren't yet public. Other claims may include forfeiting or forgoing excess profits, this person said.

The federal agency, which announced the allegations today in an e-mail, has been investigating a JPMorgan trading unit's market activities for more than a year, separate regulatory and court filings have revealed.

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