The US Justice Department has launched a new investigation against J. P. Morgan Chase over its energy sector dealings.

The move comes as the bank already faces several legal challenges from regulators. J. P. Morgan has agreed to pay $410 million to settle allegations raised by the Federal Energy Regulatory Commission that the bank was involved in manipulating markets in California and the Midwest. The nation's largest bank by assets did not admit any wrong doing.

The Federal Energy Regulatory Commission’s accusation against the company comes ahead of a likely settlement involving millions of dollars. The settlement would allow the company to avoid accusations that displayed trading strategies in a way that it showed inefficient power plants into profit centres.

JPMorgan has not commented on the accusations and has maintained that it has not done anything wrong. The bank is also defending top executives involved in traders in Houston that are blamed for preparing these trading strategies. The bank had acquired the right to sell electricity from power plants after it took over the assets of Bear Stearns in 2008.

The regulator said that the bank JPMorgan’s traders adopted eight different “schemes” from September 2010 to June 2011 to turn power plants into profit generators. They offered attractive prices and convinces some states to pay heavy amounts for the power, which pushed up price of electricity in the country.