WASHINGTON Feb 10 The non-profit group Better
Markets filed a lawsuit against the Justice Department on Monday
to block what it called an "unlawful" $13 billion settlement
with JP Morgan over bad mortgage loans sold to investors
before the financial crisis.
The record settlement with the bank, which was reached in
November, does not release JP Morgan from potential criminal
liability over the mortgages it packaged into bonds.
But Better Markets said it was still appalled that the
settlement gave the bank "blanket civil immunity" for its
conduct without sufficient judicial review.
"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 Dennis Kelleher,
the chief executive of Better Markets.
"The Justice Department cannot act as prosecutor, jury and
judge and extract $13 billion in exchange for blanket civil
immunity to the largest, richest, most politically connected
bank on Wall Street."
The lawsuit was filed in federal court in Washington.
The Justice Department in November negotiated a
wide-ranging deal with the largest U.S. bank that included a $2
billion civil penalty to resolve Department of Justice claims.
It also included a $4 billion consumer relief package, and a
separately negotiated $4 billion settlement with the regulator
of Fannie Mae and Freddie Mac.
Another $1.4 billion of the $13 billion package also
resolved a lawsuit from the National Credit Union
The DOJ settlement was released to the public but not filed
in federal court.
The agency also did not release a complaint that it had
prepared to file against JPMorgan before it negotiated the deal.