Oct 9, 2018
HSBC in $765m settlement with US Department of Justice
HSBC has reached a $765m settlement in the US over its sale of mortgage-based securities during the run-up to the financial crisis. The deal resolves claims by the US that HSBC misled buyers about the quality of the securities, which were backed by pools of home loans. "The US management team is focused on putting historical matters into the rear view mirror and completing the turn-around of HSBC's US operations," said Patrick J Burke, who heads the bank's US unit. In this instance, the US Department of Justice said HSBC misled investors about the process it used to evaluate the investments. At one point, an HSBC trader even said that a security planned for sale by HSBC would "Suck", according to the US. The activities led to major losses by investors and contributed to a crisis of foreclosures that hit the US, said Bob Troyer, US Attorney for the District of Colorado.
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