Better Markets, Inc., a nonprofit that promotes financial reform, is challenging the settlement for granting what it calls “blanket civil immunity” to the lender “for years of alleged pervasive, egregious and knowing fraudulent and illegal conduct that contributed to the 2008 financial crash and the worst economy since the Great Depression.”
The settlement came in November, after investigations into JPMorgan’s financial practices by the U.S. Financial Fraud Task Force’s Residential Mortgage-Backed Securities Working Group.
As part of the settlement deal, the nation’s largest bank was required to acknowledge that it made “serious misrepresentations” to the public about “numerous” residential mortgage-backed security transactions, according to a statement released by the Justice Department. JPMorgan will also be required to provide relief
to underwater homeowners as part of the deal. The settlement didn’t preclude the possibility that JPMorgan or its employees could face criminal charges.
But that isn’t good enough for Better Markets President and CEO Dennis Kelleher, who said the settlement – the largest of its kind in U.S. history – needed to face independent review.
“The Wall Street bailouts were bad enough, but now taxpayers are being forced to accept a secretive backroom deal that may well have been another sweetheart deal,” Kelleher said. “The Justice Department cannot act as prosecutor, jury and judge and extract $13 billion in exchange for blanket civil immunity to the largest, richest, most politically-connected bank on Wall Street. The executive branch does not have this unilateral power because it violates the constitutional requirement of checks and balances.
“Adding insult to injury, the Department of Justice did all this in an agreement that appears to have been written more to conceal than reveal,” he added. “For example, it is using the large dollar amount to blind everyone to the reality that they have disclosed no meaningful facts about what JPMorgan Chase did, who did it, who it hurt, how much they profited and how much their clients, customers and others lost. The American people deserve, and the law requires, an independent judicial review to determine whether the settlement is fair and whether it can withstand scrutiny in the light of day.”
Better Markets’ lawsuit asks the court to declare the settlement unlawful and issue an injunction to prevent the Justice Department from enforcing it until the settlement has been reviewed and approved by a court.
“As part of the judicial review, a court would have the opportunity to ask the parties for more details, which would become publicly available, about JPMorgan’s violations and the extent of the damages they caused,” Better Markets said in a statement.
A nonprofit group is suing the Justice Department over the agency’s historic $13bn settlement with JPMorgan Chase.