Morgan Stanley (MS) agreed to pay $4.8 million to settle a U.S. antitrust case over a 2006 derivative contract with KeySpan Corp. that the Justice Department said probably led to higher electricity prices in New York City.
The proposed settlement was filed today in federal court in Manhattan, the Justice Department said in a statement. KeySpan last year agreed to pay $12 million to settle.
Morgan Stanley entered into agreements with KeySpan and Astoria Generating Co., KeySpan’s largest competitor in the capacity market, that gave KeySpan a financial interest in Astoria and ensured the company would withhold output from the market and increase prices, the Justice Department said.
“Morgan Stanley is pleased to have settled this matter with the Department of Justice,” Mary Claire Delaney, a spokeswoman for the New York-based bank, said in an e-mailed statement.
KeySpan, based in Brooklyn, New York, is a unit of London- based National Grid Plc, owner of natural-gas and power networks in Britain and the U.S.
The case is U.S. v. Morgan Stanley, 11-6875, U.S. District Court, Southern District of New York (Manhattan).
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