“The Department of Justice (DOJ) settled innumerable, undisclosed claims and cases related to the worst financial crash since 1929 with JP Morgan Chase for the unprecedented amount of $13 billion. Equally unprecedented, the settlement is just a private contract that was negotiated secretly and entirely behind closed doors and which will not be evaluated or scrutinized by any court or independent party,” said Dennis Kelleher, President of Better Markets, Inc., an independent nonprofit organization that promotes the public interest in the financial markets.
“DOJ has made many claims that this is a major victory over Wall Street fraud and illegal conduct, but it has disclosed very little about its investigation or the settlement itself. DOJ is using the attention-grabbing dollar amount as a substitute for informing the public of the facts so they can judge the settlement for themselves. The American people deserve better. They deserve transparency and accountability. The credibility and reputation of DOJ are at stake in the answers to these questions,” Mr. Kelleher said.
Questions the public needs answered about the JP Morgan settlement:
- How did DOJ calculate the settlement amount and what is it based on? $13 billion is a lot of money, but there is no way to evaluate whether it is adequate to punish and/or deter JP Morgan’s massive and wide-spread illegal conduct without knowing:
- How much damage JP Morgan inflicted, including how many investors and others were victimized and how much they lost on the worthless securities that JP Morgan fraudulently offered and sold; and
- How much profit JP Morgan made, including not just from the sale of the 1,605 toxic RMBS listed, but in any other form as well, such as propping up its stock price by unloading worthless mortgage loans at inflated prices.
- Why didn’t JP Morgan admit any facts or wrongdoing? Despite DOJ’s mischaracterization of the settlement, it contains no admission of anything by JP Morgan. JP Morgan merely acknowledged DOJ’s statement of facts and had to publicly correct DOJ’s distortions concerning the statement of facts. DOJ must disclose what JP Morgan’s “acknowledgement” really means, the basis for its misrepresentation that JP Morgan had made admissions, and why it did not require any admission of wrongdoing by JP Morgan.
- What investigation did DOJ and others conduct? No one can properly settle a case unless they have conducted a complete and thorough investigation. DOJ must disclose the details of its investigation, including how many witnesses, documents, and transactions were examined, and over what period of time.
- Why were no individuals named or held accountable? Why are none of the JP Morgan Chase executives, supervisors and other staff who carried out the fraud being held accountable, or even identified, in the settlement?
- Why did DOJ decide not to file a lawsuit and not to seek court review and approval of the settlement? DOJ must explain why it chose to avoid any judicial or public scrutiny of the settlement terms and the process that led to it. Why did it choose to settle with nothing more than a private contract with minimal transparency and no accountability? What happened to the complaint it was going to file in September and the charts prepared for the press conference DOJ canceled after JP Morgan Chase CEO called his friend, Tony West, the Assistant Attorney General?
“Having suffered the worst economy since the Great Depression of the 1930s, the American people deserve a full accounting and public disclosure of details of this so-called historic settlement. Only then will they be able to determine whether or not they should have any trust and confidence in a justice system that has been badly broken and strongly biased toward the too-big-to-fail banks on Wall Street, as Better Markets set forth in greater detail here,” Mr. Kelleher concluded.
Better Markets is an independent, nonprofit, nonpartisan organization that promotes the public interest in financial reform in the domestic and global capital and commodity markets. Better Markets advocates for transparency, oversight, and accountability with the goal of a stronger, safer financial system that is less prone to crisis and failure, thereby eliminating or minimizing the need for more taxpayer funded bailouts.