Verdicts & Settlements
Suit challenges Justice Department’s $13B deal with JPMorgan
Posted Feb 12, 2014 6:20 AM CST
By Debra Cassens Weiss
A group called Better Markets contends in a lawsuit that the Justice Department’s settlement with JPMorgan violates the separation of powers because it was never approved by a judge.
The civil settlement resolved probes of the bank’s sales of troubled mortgage securities. But the Justice Department never filed suit against the bank, and the deal was reached without a judge’s approval, Better Markets says. The News York Times DealBook blog and Reuters covered the suit, filed Monday.
“The executive branch, through DOJ, acted as investigator, prosecutor, judge, jury, sentencer and collector, without any review or approval of its unilateral and largely secret actions,” Better Markets said in the lawsuit.
The chief executive of Better Markets is Dennis Kelleher, a former partner with Skadden, Arps, Slate, Meagher & Flom. A 2012 New York Times profile describes Kelleher as "a wisecracking, fast-talking operator who just happens to think that banks would devastate the economy if given the chance."
The Justice Department says it is confident the settlement complies with the law. Though no suit was filed, it released a "statement of facts” detailing now JPMorgan Chase misled investors about the faulty loans.