Rafferty Capital Markets’ Richard X. Bove weighs in on recent developments concerning JPMorgan and the DOJ lawsuit, agreeing that the suit brings up some very germane points about shareholders’ rights.
Did JPMorgan Chase Break the Law?
A nonprofit Group called Better Markets is suing the Justice Department over its actions in the $13 billion fine paid by JPMorgan Chase & Co. (NYSE:JPM). The Better Markets group (BMG) filed its complaint in the United States District Court in Washington DC. BMG claims that the Justice Department violated constitutional requirements when it unilaterally struck a deal without a judge’s blessing.
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“The executive branch through DOJ, acted as investigator, prosecutor, judge, jury, sentence and collector without any review or approval of its unilateral and largely secret actions.”
The group is demanding that the Justice Department provide “ample and detailed record so that such court may review all the facts and circumstances.” I have no idea how the District Court in Washington will respond to this request but I do know that the plaintiffs are in the right and the Justice Department has violated every tenet of fairness and equity in its actions. For years I have been writing that:
- The Justice Department and State Attorney Generals have argued their cases through press leaks to a media that has abdicated its requirement to act objectively.
- The shareholders of JPMorgan Chase & Co. (NYSE:JPM) were being fined for actions that they did not commit.
- The supposed miscreants in these actions were not being fined or subjected to legal scrutiny.
- The banks were being extorted to agree to fines by a government who has the power to remove their charters if they did not pay up without trials – a government which apparently is willing to use those powers.
- The Board of JPMorgan Chase & Co. (NYSE:JPM) should have been removed for agreeing to give away shareholder money without a fight in court.
- No one has cared about the in-justice being acted out here by a McCarthyite Justice Department, set of banking regulators and press who feel no obligation to abide by the need for oversight in a Democracy.
Hopefully, the Better Markets Group will prevail in their actions. They are forcing oversight on an out-of-control group of regulators who pay scant respect to the laws of this land. It is significant that this suit is being brought in Washington rather than New York where the legal establishment and media is arrayed against the banking industry and a fair trial is questionable.
The lawsuit argues the following concerning the $13 billion settlement:
“This contract was the product of negotiations conducted entirely in secret behind closed doors. No one other than those involved in those secret negotiations has any idea what JPMorgan Chase & Co. (NYSE:JPM) really did or got for its $13 billion because there was no judicial review or proceeding at all regarding this historic and unprecedented settlement.”
Amen, brother; well said. Shareholders have rights which no one in this settlement cared to consider.