JPMorgan Chase & Co. (NYSE:JPM-C) and U.S. energy-market regulators are said to have settled what could be the largest payout in the history of the Federal Energy Regulatory Commission, or FERC, the Wall Street Journal said Wednesday.

People familiar with the negotiations told the newspaper that FERC accused JPMorgan Chase, the largest U.S. bank as measured by assets, of manipulating electricity markets in California and the Midwest.

FERC contacted the bank in March saying it was recommending an enforcement action against its power trading unit, J.P. Morgan Ventures Energy Corp. The notice claimed the bank misrepresented prices of electricity contracts with California and the Midwest that resulted in overpayments. The document said that Masters and three other traders had made false representations under oath.

J.P. Morgan disputed the allegations in a document that ran hundreds of pages long and defended its position.

The bank has said FERC’s charges were unfounded and some business executives said the bank should not settle because it did nothing wrong.

There was an earlier offer from FERC that involved banning three traders from the commodities markets, but Blythe Masters, who runs J.P. Morgan's commodities unit, rejected it.

On Tuesday, FERC had imposed a whopping $435 million fine against the British bank Barclays PLC (NYSE:BCS) over claims that it too had manipulated California’s energy markets in 2006-2008.