The $13 billion settlement between JPMorgan Chase and the Justice Department is rife with injustice toward the bank, according to a Wall Street Journal editorial.

"We defy anyone to follow the logic of Tuesday's Morgan agreement," The Journal editors write.

The Justice Department says other financial institutions were victimized by purchasing rotten mortgage-backed securities from JPMorgan.

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"But the alleged victims include institutions where the government has separately accused managers of their own mortgage misdeeds," the editorial says.

Another issue is that much of the $13 billion won't go to the investor victims, it notes. "Morgan will pay a $2 billion fine to Justice, apparently for harming itself."

Government lawyers claim that under the Financial Institutions Reform, Recovery and Enforcement Act, JPMorgan can be found guilty of hurting itself, the editorial notes.

"One wonders why Morgan doesn't therefore deserve at least some compensation from Morgan."

Some money also will be allocated to "efforts to reduce blight," according to the settlement.

"And if the bank doesn't spread enough of the wealth around in this manner, it must pay 'liquidated damages in the amount of the shortfall to NeighborWorks America, a non-profit organization and leader in providing affordable housing and facilitating community development,'" the editorial claims.

A key benefit for JPMorgan in the settlement may be that it didn't explicitly admit to wrongdoing.

"They've left themselves some wiggle room to say, 'No we didn't violate the law,'" Peter Henning, a former federal prosecutor who teaches law at Wayne State University in Detroit, tells Bloomberg.

"There is at least some acknowledgment that there were improprieties, but exactly what they were remains open, and certainly they can deny it in any specific case."

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