HSBC to appeal judgment in fraud suit - The Buffalo News

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HSBC to appeal judgment in fraud suit

LONDON HSBC Group said Friday that it would appeal yet again a $2.46 billion judgment in a long-running securities fraud lawsuit in the United States related to a consumer-loan and credit-card business that the British bank acquired more than a decade ago.

The shareholder lawsuit alleged that Household International, now known as the HSBC Finance Corp., misled investors about its lending practices, the quality of its loans and its accounting between 1999 and 2002.

The lawsuit has wound its way through U.S. courts for 11 years and has been regularly noted in HSBC’s corporate filings. A federal jury in 2009 in Chicago found partially in favor of the shareholders, but HSBC and the other defendants have repeatedly challenged that verdict.

In a decision issued Thursday, Judge Ronald A. Guzman of U.S. District Court in Chicago ordered HSBC, as well as three of Household International’s former executives, to pay about $1.48 billion in damages and $986.4 million in prejudgment interest. The defendants were ordered to pay interest while their challenge is heard, most likely in the U.S. Court of Appeals for the 7th Circuit. “We plan to appeal and believe we have a strong argument,” Patrick Humphris, a spokesman for HSBC, said Friday. It is the largest judgment in a class-action trial for securities fraud, according to Robbins Geller Rudman & Dowd, the law firm representing the shareholders. It said it continued to challenge objections by the defendants to more than 25,000 additional claims that, if approved, could exceed $650 million. That would bring the total class of claims to more than 45,000 plaintiffs. James Glickenhaus of Glickenhaus & Co., said in a statement, “We are very pleased that we went the distance in this case, all the way through a jury trial, and that we were able to obtain such a tremendous recovery for shareholders.”

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