WASHINGTON — A public advocacy group filed a legal challenge Monday to block implementation of a record $13 billion civil settlement between Attorney General Eric Holder and Wall Street powerhouse JPMorgan Chase & Co.

The group, Better Markets, argued that reaching a settlement 300 times the nearest similar settlement without any sort of judicial review amounted to a power grab by the executive branch and Holder.

“It reads the separation of powers right out of the Constitution,” Better Markets President Dennis Kelleher said at a news conference. Kelleher is a former top Democratic lawyer in the Senate and a onetime securities litigator at the law firm Skadden, Arps, Slate, Meagher & Flom.

Holder negotiated privately with JPMorgan Chase CEO Jamie Dimon to reach the November deal, in which Wall Street’s top bank did not admit guilt and simply agreed to a statement of facts. The privately brokered deal, Kelleher said, put on ice plans by federal prosecutors in Sacramento, Calif., to seek an injunction against JPMorgan Chase.

“This case really stands out, let’s face it, for the power grab,” Kelleher said.

The settlement did not preclude criminal charges brought against JPMorgan Chase employees or those in companies it acquired. But since the 2008 financial crisis, there have been few prosecutions of high-level Wall Street executives.

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Monday’s legal filing asks the U.S. District Court for the District of Columbia to impose an injunction halting the settlement with JPMorgan Chase from going forward. It calls the settlement unconstitutional and also alleges it violates the Administrative Procedures Act and more importantly the Financial Institutions Reform, Recovery and Enforcement Act of 1989.

The latter is the tool the Justice Department frequently uses to settle lawsuits with Wall Street. If a court were to rule against the attorney general, it could discourage future use of the act to reach settlements.

One prominent legal expert called the Better Markets effort a long shot.

“While Better Markets is a well-intentioned and aggressive advocate for investors, I do not believe there is any basis or support in law for their position,” said John Coffee, a securities law professor at Columbia University in New York. “The executive branch can settle disputes with a third party without seeking court approval.”


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