HSBC To Pay $1.575B To End 14-Year-Old Lending Lawsuit
HSBC Holdings agreed to pay $1.575B to end a 14-year-old shareholder class-action lawsuit dealing with questionable mortgage lending.
The lawsuit comes from lending practices utilized at Household International, a firm HSBC bought in 2003, Reuters reports. It looks like HSBC will end up paying a $585M pre-tax charge in Q2 for the settlement, a light payment considering the firm said it could have faced penalties as high as $3.6B.
The case began in 2002 when Household shareholders accused the firm of boosting its share price by hiding poor lending practices and bad loan quality. [Reuters]