A Wall Street watchdog group founded by an Atlanta hedge fund manager said, JPMorgan Chase & Co. (JPM)’s $13 billion fraud settlement with the U.S. government should be blocked until a court is able to review it.
“No one has any ability to determine if the $13 billion agreement is fair or if it’s a sweetheart deal,” the group said in the filing. According to a complaint filed today in Washington federal court, Better Markets Inc. is seeking a judicial investigation of the deal because it’s the largest settlement “with a single entity in the 237-year history of the U.S.”
The deal that was announced in November, settled claims that they misled investors and the public by selling bonds that were backed by faulty residential mortgages. The U.S. and state officials blamed JPMorgan’s actions for helping to cause the credit crisis. Also the agreement didn’t protect JPMorgan or it’s employees from possible charges.
According to Dennis Kelleher, chief executive officer of Better Markets, the Justice Department “acted as investigator, prosecutor, judge, juror, sentencer and collector. The agreement was “mostly designed to conceal, not reveal,” he said at a press conference. A spokesman for the New York based JPMorgan, Brian Marchiony, declined to comment on the accusation.
“The department is confident that the settlement reached with JPMorgan Chase complies with the law,” Ellen Canale, a Justice Department spokeswoman, said in an e-mail.
Better Markets is a self described “non-profit, nonpartisan organization that wakes the public’s interest in financial reform.” The founder is Michael Masters, a member and founder of the Atlanta-based Masters Capital Management. Their standing derives from its public interest purpose being confused by a lack of transparency in the settlement process and the lack of a “judicial forum in which it could seek to participate to influence” the outcome, the group said in its complaint.
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