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February 10, 2014

Lawsuit Claims JPMorgan Deal with DOJ Was Illegal

“A lawsuit filed Monday in Federal court in Washington, DC challenges the legality of a $13 billion settlement between the Justice Department and financial services giant JPMorgan Chase which, last November, gave the bank blanket immunity from civil prosecution by the government for its role in the sale of questionable mortgage securities in advance of the financial crisis.

“Better Markets, the DC-based non-profit dedicated to increasing transparency in the financial markets that filed the lawsuit, claims the Justice Department violated the law by failing to submit the record-breaking settlement to a judge for approval.

“Dennis Kelleher, president and CEO of Better Markets, said the arrangement between the Justice Department and the bank was a “secret, back-room deal” resulting in “yet another sweetheart deal for yet another Wall Street bank.”

“Despite the rhetoric, Kelleher’s claim is not so much that the settlement was inadequate as that nobody has the information necessary to make that judgment in the first place. The documents released by DOJ at the time point to what appears to be widespread misconduct by individuals creating mortgage-backed securities at JPMorgan Chase, as well as Bear Stearns and Washington Mutual, two failed financial institutions that JPMorgan bought during the financial crisis. However, they give no sense of how much money the bank made through the sale of those securities, how much damage they inflicted on the economy as a whole, and who was responsible.”

Read full Fiscal Times article here

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