U.S. rejects challenge to $13 billion JPMorgan Chase settlement
By Jonathan Stempel
(Reuters) - The U.S. government urged a federal judge to throw out a lawsuit seeking to scuttle its landmark $13 billion settlement with JPMorgan Chase & Co, rejecting a claim that the accord let the largest U.S. bank off too easily.
Better Markets Inc, a nonprofit critical of Wall Street, had in February accused the government of "unilaterally" engineering a backroom accord giving JPMorgan "blanket civil immunity" for selling shoddy mortgage securities before the financial crisis.
It said this violated the constitutional separation of powers and called for a judge to review the November settlement.
The accord included a $2 billion fine payable to the U.S. Department of Justice. The Better Markets case was prompted by the department's decision not to make its accusations public in a lawsuit before settling with JPMorgan.
In a court filing on Monday night, however, the Justice Department said its decision to settle was "presumptively" unreviewable, and that Better Markets lacked standing to sue.
The department also rejected Better Markets' suggestion that it had "abdicated" its law enforcement duties by not driving a harder bargain with JPMorgan and chief executive Jamie Dimon.
It noted that the civil settlement was the largest in U.S. history, dwarfing the $3 billion that JPMorgan once proposed, and that reopening it could take billions of dollars from people it was meant to help: troubled homeowners.
The Justice Department's power "to settle claims of the United States is undiminished, and that includes 'the power to make erroneous decisions as well as correct ones,'" the department said, citing a 1928 U.S. Supreme Court decision. Continued...