The US Justice Department reached a secretive, backroom deal when it agreed to a landmark $13bn settlement with JPMorgan Chase to resolve allegations that the bank mis-sold mortgage securities, according to a lawsuit filed yesterday.
Better Markets, a non-profit group that promotes the public interest in financial markets, is asking a court to declare the deal unlawful and issue an injunction to prevent the DoJ from enforcing it until it has been approved by a judge.
Better Markets said that the DoJ violated the US Constitution and laws by using a contract agreement to settle with JPMorgan without subjecting it to independent judicial review. Better Markets added that the agency cannot act as “investigator, prosecutor, judge, jury, sentencer and collector, without any checks on its authority”.