Justice Department Sued Over Settlement with JP Morgan ChaseBanker Resource
February 14, 2014 — 1,363 views
The Justice Department was recently sued by a public interest group for its settlement of a record $13 billion with JPMorgan Chase & Co. The group has argued that the deal signed for resolving investigations related to faulty mortgage investment between the two was unconstitutional as none of the courts reviewed it.
JPMorgan hit by another trouble
This suit was filed by Better Markets Inc. in the District Court of US in Washington, D.C. Better Markets has always been a critic of Wall Street and the regulators of the financial crisis aftermath. This nonprofit group mentioned that top Justice officials, including Atty. Gen. Eric H. Holder, shouldn’t have been allowed to give immunity to JPMorgan. The group believes that JPMorgan has been involved in years of egregious, pervasive and informed illegal as well as fraudulent conduct that even contributed to the financial crisis of 2008, making the economy come to its worst state since the Great Depression.
At a recent news conference, the president of the nonprofit group, Dennis Kelleher told the reporters that the suffering and bailout of the people of America in 2008 and 2009 requires JPMorgan to suffer for its misdeeds. He added that it is a lot to ask to the citizens of the country and the taxpayers to live with this secret backroom deal of the bank.
It was after a lot of negotiations by Chief Executive of JPMorgan, Jamie Dimon and Holder, that the bank had agreed to pay the large settlement amount, in November. This settlement amount is the largest ever paid by any American company.
Paying the largest settlement amount doesn’t seem to be helping
This deal also included a civil penalty of $2 billion along with $4 billion for providing help to homeowners struggling nationwide due to the crisis. JPMorgan had admitted that it knew about the selling of toxic securities that were mortgage-backed. These securities are said to be responsible for the financial crisis and sub-prime housing bubble which followed soon after.
However this settlement didn’t help the bank in resolving criminal investigations against its activities that are being headed by the office of the US Attorney of Sacramento.
Apart from calling the settlement unconstitutional, Kelleher has also questioned if the payment of $13 billion by the bank was enough for offsetting the damage that it caused to the economy. He also mentioned that lack of enough information on the deal makes it difficult to determine whether it is fair or not.