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February 10, 2014

Legality of JPMorgan’s $13bn settlement with DoJ tested

“The US Justice Department reached a secretive, backroom deal when it agreed to a landmark $13bn settlement with JPMorgan Chase to resolve allegations that the bank mis-sold mortgage securities, according to a lawsuit filed Monday.

“Better Markets, a non-profit group that promotes the public interest in financial markets, is asking a court to declare the settlement unlawful and issue an injunction to prevent the DoJ from enforcing it until it has been reviewed and approved by a judge.

“Better Markets said the DoJ violated the US Constitution and US laws by using a contract agreement to settle with JPMorgan without subjecting it to independent judicial review. Better Markets added that the agency cannot act as “investigator, prosecutor, judge, jury, sentencer and collector, without any checks on its authority”.

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“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,” said Dennis Kelleher, president of Better Markets.

“Mr Kelleher said his group is not disputing the DoJ’s authority to settle civil matters in general, but given the scope and ramifications of the JPMorgan case, he argues it should have been reviewed by the courts.”

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Read full Financial Times article here

 
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