JPMorgan Chase's landmark 2013 settlement with the Department of Justice is one of the largest of all time, and with a tag like that its unsurprising that it has drawn both positive and negative attention.
But on Feb. 10, the agreement was challenged for the first time, drawing into question its validity under the Constitution.
The non-profit group Better Markets has filed a lawsuit against the DOJ saying that crucial details about its deal with JPMorgan were not made public, calling into question the validity and constitutionality of the deal. The suit, which was filed in the United States District Court of the District of Columbia, alleges that the deal is invalid because it was agreed to unilaterally, without the oversight of a judiciary body.
"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 deal in questions closed numerous probes into the mortgage-backed securities dealings of JPMorgan during the run up to the financial crisis. While the exact details of the deal were not divulged, what is known is that JPMorgan shelled out $13 billion to settle the investigation.
The settlement included $1.4 billion earmarked for the NCUA to recover losses from investments made by failed corporate credit unions. The amount eliminated a 2014 corporate assessment for federally insured credit unions, which was announced by the NCUA during its November board meeting.
Better Markets leader Dennis Kelleher has been outspoken about his problems with the deal since it was penned in November. He has argued that the information released by the DOJ was not enough to hold JPMorgan accountable in any meaningful way.
"No one other than those involved in those secret negotiations has any idea what JPMorgan Chase really did or got for its $13 billion because there was no judicial review or proceeding at all regarding this historic and unprecedented settlement," the lawsuit says.
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