February 10, 2014

Suing DOJ to Require Transparency & Accountability

On February 10, Better Markets filed a lawsuit in Federal Court in DC challenging the Department of Justice’s (DOJ) unilateral, historic and unprecedented $13 billion settlement with JP Morgan Chase. It is the largest settlement with a single entity in the history of the country and involved the biggest, richest and most politically well-connected bank in the country. Yet, that agreement was a mere contract and was not reviewed or approved by any court. And, it gave JP Morgan Chase complete civil immunity for years of alleged pervasive, egregious and knowing fraudulent and illegal conduct, which contributed to the worst financial crash since 1929 and the worst economy since the 1930’s.

Adding insult to injury, this deal was cut in secret by the DOJ and JP Morgan Chase with the DOJ acting as investigator, prosecutor, judge, jury, sentence and collector without any independent review by a judge. This violates the constitutional separation of powers because there are no checks and balances on the back room deals that DOJ cuts with Wall Street.

Making matters worse, the agreement fails to disclose any meaningful information about JP Morgan Chase’s alleged widespread illegal conduct. In fact, the deal was clearly carefully crafted more to conceal than reveal. As a result, there is no publicly available information that would enable anyone to determine if the agreement is, as the DOJ claims, tough, or just another sweetheart settlement for a Wall Street bank. Given the DOJ’s motive and self-interest in burnishing its record of failure to go after Wall Street, its claims about the settlement must be reviewed by an independent court.

And, don’t be fooled by the big dollar amount. Sure, $13 billion is a lot of money, but not to Wall Street, not to JP Morgan Chase, not relative to the amount of damage the financial crash has cost this country, and not if JP Morgan Chase’s liability was $200 billion or more, or if its profits from its illegal actions were more than $13 billion or if the losses and damages it caused exceeded $13 billion. But, none of this is known because DOJ settled with JP Morgan Chase without disclosing a single one of those facts.

The American people have a right to know these basic facts and judge for themselves whether the DOJ was really tough and punished the biggest Wall Street bank as it claims or if this is just more of the same from a DOJ that has failed so miserably to enforce the law on Wall Street. That’s why we sued DOJ and that’s why any settlement must be submitted to a judge for an independent, public review.

In “The people versus Wall Street banks,” the Financial Times stated its support for Better Markets’ efforts to increase accountability of Washington and Wall Street, writing that the lawsuit “raises valid questions about the way the judicial authorities have dealt with the post-crisis reckoning.

An editorial in the New York Times from March 15, 2014 outlining a recent report from the Inspector General of the Department of Justice that draws attention to the lack of criminal prosecutions made my the Department of Justice. The report concluded that financial crimes were the lowest priority for the criminal investigative division. This is one of the many reasons why Better Markets sued the Department of Justice.

Here are some other important articles about the lawsuit: