Legality of DOJ's $13B settlement with JP Morgan challenged in court

The complaint alleges that the Justice Department and Eric Holder went above and beyond their powers to negotiate the settlement without review by a court.
Posted By Ananth Baliga   |   Feb. 10, 2014 at 5:20 PM
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WASHINGTON, Feb. 10 (UPI) -- Non-profit watchdog group Better Markets is questioning the legality of the Justice Department's $13 billion settlement with J.P. Morgan Chase & Co.

The organization, which seeks financial reform, has filed a complaint in a federal court against the DOJ and Attorney General Eric Holder challenging the landmark agreement to settle the issuance of bad mortgage bonds prior to the financial crisis.

Better Markets is challenging the validity of the agreement as it was "never reviewed or approved by any court." The complaint goes on to state that the DOJ acted beyond its given powers and violated the separation of peers doctrine.

The suit alleges that the executive branch, through the Justice Department, acted as "investigator, prosecutor, judge, jury, sentence and collector, without any review of approval of its unilateral and largely secret actions."

"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 the group's President and Chief Executive Officer Dennis Kelleher in a statement.

The group considers $13 billion too low a sum to exchange for civil immunity for J.P. Morgan in cases involving potential fraud and other improprieties that contributed to the 2008 financial crisis and the following recession.

The non-profit is asking for Justice Department to submit the agreement to a court for review.

[Wall Street Journal]

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