HSBC hit with $2.46bn judgment in US class action
New York, October 18, 2013
A unit of British bank HSBC Holdings was hit on Thursday with a record $2.46 billion final judgment in a US securities class action lawsuit against a business formerly known as Household International.
The judgment by US Judge Ronald Guzman in Chicago was the largest in a securities fraud class action that went to a trial, according to a statement from the Robbins Geller Rudman & Dowd law firm that represented investors.
Almost all securities fraud class action cases settle before going to a jury.
The suit was filed in 2002 and alleged Household International, its chief executive, chief financial officer and head of consumer lending made false and misleading statements that inflated the company's share price.
The plaintiffs also claimed that Household artificially boosted its share price by engaging in predatory lending and hid the quality of its loan portfolio.
When reports about Household's lending practices began to emerge in 2001, the share price sank to a seven-year low.
HSBC bought the US lender in November 2002.
HSBC believes it has a strong case and plans to appeal, according to an HSBC spokesman. He added that the matter has been noted in HSBC regulatory filings.
In 2010 a Manhattan federal jury found Vivendi SA liable for misleading statements to investors and damages were estimated at $9.3 billion. However, after various challenges and appeals, the vast majority of that case was dismissed. - Reuters
More INTERNATIONAL NEWS Stories
- Two Europeans not on board 'missing' Malaysian jet
- China draws red line on North Korea
- Saudi sentences three to death for 2003 bombing
- First bitcoin machine opens in UK
- US sanctions will boomerang, warns Russia
- China plans $50bn bank to fund projects
- Sony to sell Tokyo 'birthplace'
- Obama orders sanctions over Russian moves
- Crimea parliament votes to join Russia
- Arab League to be revamped
- 'Upskirting' is legal: Massachusetts court
- Singapore probes 'unnatural' death of bitcoin trader
- Onus on world powers for Syria war crimes: UN
- US, Russia set for talks on Ukraine crisis
- Brent oil drops below $109
- Services outshine manufacturing, pushing up jobs
- Bitcoin bank shut down after hacker attack
- India to kick off world's biggest poll on April 7
- China signals focus on reforms
- Hundreds ready for bitcoin exchange class action
- Space taxi, Jupiter mission in Obama budget
- Putin: Use of force last resort in Ukraine
- Powers to boost Lebanese military, economy
- Egypt bans Hamas activities in Egypt
- Putin ends army exercise, markets rally
- Russia has violated international law: Obama
- Russian markets hit as Putin tightens grip on Crimea
- Iran nuclear deal 'being implemented as planned'
- Global factory growth stumbles as demand falters
- Obama warns of 'fallout' for Israel if peace effort fails