New York: A federal appeals court has awarded HSBC a new trial in a securities class action suit that ended with a USD 2.46 billion judgment against the company.
The ruling was made yesterday by the US Court of Appeals for the Seventh Circuit. Europe's largest bank said it argued the verdict in the case, which dates to 2009, was defective and should be reversed. The company said it looks forward to the new proceedings.
In 2013 a division of HSBC was ordered to pay USD 2.46 billion in a class action lawsuit that said its Household International mortgage lending business violated federal securities laws by misleading investors about its lending practices, the quality of its home loans and its financial accounting in 2001 and 2002.
HSBC bought Household International in 2003. The acquisition made HSBC the largest subprime mortgage lender in the US at the time, but it resulted in billions of dollars in losses leading up to the 2008 financial crisis.
The lawsuit also included former executives William Aldinger, David Schoenholz and Gary Gilmer. The judgment included USD 1.48 billion in damages and almost USD 1 billion in pre-judgment interest.
HSBC also said it is exploring options for its business in Brazil, and may sell the division.
American Depositary Shares of HSBC Holdings PLC rose 14 cents to USD 48.10 in midday trading today.