A nonprofit legal group said Monday that it is seeking judicial review of the landmark $13 billion settlement that JPMorgan Chase executives negotiated with top Department of Justice officials.
The group, Better Markets, claims the settlement is a "backroom" deal that Jamie Dimon, JPMorgan's chairman and chief executive, negotiated with Attorney General Eric Holder to resolve complaints about the bank's subprime mortgage securitization activities prior to January 2009.
The $13 billion settlement gave the firm "complete civil immunity" for all its allegedly fraudulent and illegal conduct leading up to the financial crisis, according to the group.
The lawsuit directly challenges Holder's authority to enter into this lawsuit without judicial review. Dennis Kelleher, president and chief executive of Better Markets, told reporters at a press conference that the settlement is unprecedented in dollar terms and unique in the way it was negotiated.
He also faulted the settlement for not requiring JPMorgan to change its business practices or specifically identify any allegedly illegal activities undertaken by the bank.
"There are no facts from which anyone can determine if this settlement is fair, adequate, reasonable or appropriated," Kelleher said.
A spokesperson for JPMorgan declined to comment on the lawsuit, while the Justice Department did not respond to a request for comment.
Kelleher said that $13 billion was not a significant fine for the bank considering it still reported a profit last year.
If the U.S. District Court for the District of Columbia decides to review the settlement, the court would have the "opportunity to ask the parties for more details, which would become available, about JPMorgan's violations, and the extent of the damages caused," according to the Better Markets, which advocates for safer and more transparent financial markets.
The Better Markets case could have implications for other settlements the Justice Department reached with other Wall Street banks over their mortgage activities. But Kelleher stressed the JPMorgan settlement "really stands out" for the way it was negotiated, calling it a "power grab."